How can annual interest pd on fixed mortgage differ so much?
I have a fixed rate mortgage, 30 yrs. No balloon payment.
Monthly payment is $918 but I always pay $1000 each month with the overage I indicate as going to principal, I have no mortgage insurance (as I had 20% down) and I have no escrow of taxes and I always pay it approx a week before it is due. No exceptions. This is now beginning year 7 of the loan.
I have noticed that when I get my annual statement of mortgage interest for tax purposes the amout of interest paid for the year varies greatly. In 2010 I had about $8200, in 2011 $9200 in 2012 $7500 in 2013 $8600 (rounded figures).
I am perplexed as to how on earth I can be paying MORE annual interest (just in the last year $1100 more) when in fact I have a smaller principal upon which that interest is being calculated with each subsequent year? This, to me, seems mathematically impossible. Even if I figure OK some months I may have more days accruing interest depending on what date my payment is received but considering my habit is always to pay a week (or more) in advance of the payment due date I would think that would even out month to month ver 12 months and certainly shouldn't cause a $1000 increase in interest paid.
Is there something about amortization of a loan that I am not understanding?