Final answer:
To calculate total payments on a mortgage over the first five years, you need the loan term, principal, and APR. Multiply the monthly payment calculated by 60 to find the total. Interest rates significantly affect the affordability and total cost over the life of the loan.
Step-by-step explanation:
To compute the total payments on principal and interest over the first five years of a mortgage term, we need to know the exact term of the loan (e.g., 30 years), the principal amount, and the annual percentage rate (APR). Without these specific details, we can only illustrate the process generically. Assuming a 30-year term with an APR compounded monthly, you would use the formula for the monthly mortgage payment: M = P[r(1+r)^n]/[(1+r)^n-1], where M is the monthly payment, P is the loan principal, r is the monthly interest rate (APR divided by 12), and n is the number of payments (loan term in years multiplied by 12).
To distinguish between principal and interest paid during that period, you often need an amortization schedule, which shows the breakdown of each payment. Consider the provided example where a home loan jumps from a 4% introductory interest rate to 7%. The monthly interest payment would rise significantly, impacting the homeowner's ability to pay.