Does the Amortisation Graph view and other repayment tables of Karl Jeacle's mortgage calculator clarify anything at all for you? In particular the repayment tables outlining the capital/interest split of repayments over the lifetime of the mortgage?The Term in this instance is
"Because mortgage loans are calculate with APR interest then all the interest is front loaded and therefore the prinicipal does not decline in the early years"
...
What does it mean?
Looks plausible to me judging by the Annual Table view of Karl's calculator and using a representative interest rate of 5%.At a high level I have a €312,500 mortgage over 35 years that I have been paying for 8.5 years (24.5% of the lifetime of the loan has passed) yet only 14% of the prinicpal has been paid.
Does that sound right.
312,500 by .05 = 15625 in interest in year 1. Let's say payments of an average of €1350 per month =16,200. So 600 a year paid of the prncipal and so on. Obviously the longer the term of the mortgage the worse for the principal.
Yes, you have pretty much got the concept now I think. Far too much emphasis is put on APR, its not that helpful an indicator.
You've got an extra year in each of these examples - 01/01/2010 to 31/12/2011 is two years, not one. And to be exact, the repayment should be the same day otherwise you are looking at a 364 day not a 365 day loan. Your examples are correct if looked at from 01/01/2010 to 01/01/2011 (or any other full year period).1: If a borrower pays 11 euro interest on a one year loan of 100 euros, drawn down in full on 01/01/2010 and repaid in full on 31/12/2011: the APR is 11%
2: If a borrower pays 10 euro interest on a one year loan of 100 euros, drawn down in full on 01/01/2010 and repaid in full on 31/12/2011, and in addition pays one euro in arrangement fees: the APR is 11%
£: If a borrower pays 1 euro interest on a one year loan of 100 euros, drawn down in full on 01/01/2010 and repaid in full on 31/12/2011, and in addition pays ten euro in arrangement fees: the APR is 11%
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?