# Interest Due

- The portion of a current mortgage payment that is comprised of interest on the remaining principal amount. In a standard amortizing mortgage, the first payments will go mainly toward interest due, with only a small percentage of the payment going toward reducing the principal amount. When the next monthly payment comes around, the interest due will be calculated on the updated principal amount, which will have decreased slightly from the prior month's payment.

As time progresses, the interest due each month should fall as a percentage of the monthly payment, with more money going toward reducing the principal.

If a borrower has signs on for an "interest-only" mortgage, the entire monthly payment will only be covering the interest due on the loan, with a balloon payment expected to pay down the entire principle amount at the very end. These types of mortgages are entered into with the expectation of being able to refinance the entire loan before the balloon payment is due.

As long as real estate prices are rising, this model works well as there will be equity value built up in the home, which can be accessed when refinancing the debt. If, however, real estate prices are flat or falling, then the option to refinance won't be available, and the borrower may face foreclosure of the home or a balloon payment that they may not be able to afford.

*Investment dictionary.
Academic.
2012.*

### Look at other dictionaries:

**due process**— n 1: a course of formal proceedings (as judicial proceedings) carried out regularly, fairly, and in accordance with established rules and principles – called also procedural due process; 2: a requirement that laws and regulations must be related… … Law dictionary**Interest**— Interest † Catholic Encyclopedia ► Interest Notion of interest Interest is a value exacted or promised over and above the restitution of a borrowed capital. ♦ Moratory interest, that is interest due as an indemnity or a… … Catholic encyclopedia**interest rate**— n. The percentage used to calculate interest due on a loan. The Essential Law Dictionary. Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008. interest rate … Law dictionary**Interest**— For other uses, see Interest (disambiguation). Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money,[1] or money earned… … Wikipedia**Due process**— is the legal code that the state must venerate all of the legal rights that are owed to a person under the principle. Due process balances the power of the state law of the land and thus protects individual persons from it. When a government… … Wikipedia**interest**— in·ter·est / in trəst; in tə rəst, ˌrest/ n [probably alteration of earlier interesse, from Anglo French, from Medieval Latin, from Latin, to be between, make a difference, concern, from inter between, among + esse to be] 1: a right, title, claim … Law dictionary**due**— [djuː ǁ duː] adjective 1. [not before a noun] if an amount of money is due, it must be paid now or at the stated time: • Breakwater said it was unable to meet an interest payment due yesterday. see also past due 2. [only before a noun] LAW prop … Financial and business terms**Interest rate parity**— is a no arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries.[1] Two assumptions central to interest rate parity are capital mobility and… … Wikipedia**Interest rate risk**— is the risk (variability in value) borne by an interest bearing asset, such as a loan or a bond, due to variability of interest rates. In general, as rates rise, the price of a fixed rate bond will fall, and vice versa. Interest rate risk is… … Wikipedia**Due to Lack of Interest, Tomorrow Has Been Canceled**— is a 1969 book by Irene Kampen, an account of her return to school at the University of Wisconsin–Madison after 25 years, and how she learned to adapt to the student culture of the late Sixties. While it is listed as non fiction, Kampen included… … Wikipedia