Mortgage Interest

Mortgage interest is the cost incurred for borrowing money to purchase real estate, typically expressed as a percentage of the loan amount. When an individual takes out a mortgage, they agree to repay the borrowed principal amount plus interest over a specified period. This interest is the lender's compensation for the risk of lending and is calculated based on the outstanding loan balance. Mortgage interest can be fixed, remaining the same throughout the life of the loan, or variable, fluctuating with market interest rates. The interest payments generally represent a significant portion of the monthly mortgage payment and are often tax-deductible in many jurisdictions, making mortgage financing a common method for individuals to acquire property.