Monthly payment mortgages using the 365 day year, exact day monthly interest factor method, have a slightly higher effective interest rate (EIR).

Always ask for an amortization schedule when you borrow money. To be absolutely in the know, also ask for the annual interest rate to be quoted to 4 decimal places.

The APR will not help you in this scenario. To find out why, continue reading!

Bob and Mary, a young married couple purchase their first home and obtain a 30 year $100,000 mortgage and neglect to ask for an amortization schedule before signing the deal. Below is one of the possible amortization schedules they could have been given.