How to Calculate Mortgage Interest Fractions Into Decimals

Decimal interest rates are easier to compare than those with fractions.

Decimal interest rates are easier to compare than those with fractions.

A mortgage interest rate represents the annual cost you pay as a percentage of your loan balance to borrow money. If you’re aware of them, you’ll see mortgage rates in advertisements, newspapers and many other places. While most rates are quoted as a decimal percentage, you might occasionally see one as a mixed-number percentage, which includes a fraction to the right of a whole number. To compare rates accurately and perform mortgage calculations, you can convert these mixed-number rates into decimal format with a couple of quick calculations.

Divide the numerator by the denominator in the fraction portion of the mixed-number interest rate to convert that portion into a decimal. For example, assume you want to convert the interest rate 6 7/8 percent into a decimal. Divide the numerator, 7, by the denominator, 8, to get 0.875.

Add the whole-number portion to your result and keep the percent sign to calculate the entire interest rate as a percentage in decimal format. You can compare this format with other quoted rates in the same format. In this example, add the whole number 6 to the decimal 0.875 and keep the percent sign to get a rate of 6.875 percent. When comparing this with, say, 6.9 percent and 6.75 percent, you can easily determine that it falls in between the two.

Divide your result by 100 to calculate the interest rate as a decimal without the percent sign. Use this format in mortgage calculations. In this example, divide 6.875 by 100 to get 0.06875 as a decimal without the percent sign.


  • To calculate the portion of a monthly mortgage payment that would go toward interest based on the quoted rate, divide your Step 3 result by 12 and multiply that result by your mortgage’s loan balance. This interest amount typically decreases each month as you pay down your loan balance. For example, assume your mortgage has a $300,000 balance. Divide 0.06875 by 12 and multiply by $300,000 to get approximately $1,719 in monthly interest.

About the Author

Bryan Keythman has performed stock investment research and writing for a consulting firm since 2008. He also has prior experience sourcing and underwriting commercial real-estate investment and development opportunities for a commercial real-estate developer. Keythman holds a Bachelor of Science in finance.

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