Calculating Mortgage Repayments

A

amiafool

Guest
Hi,
i know there are lots of "calculators" out there advising how much you have to repay on mortgages etc.

However, I'm trying to find out if the following is accurate
You borrow 400,000
Term 25 years
Intrest Rate 3.5%

Calculating repayment as follows???

400,000 divided by 3.5% gives you a years repayment
a years repayment divided by 12 gives me a monthly repayment

Or what am i leaving out - i'm not that clever!!

Thanks,
 
A (very) rough way to work it out is to work out 3.5% of 200000 ie 7000 and a 25th of 400k as your capital 16k makes 23k a year or about 2k a month.You work out the interest on half the amount because over the life of the loan you will on average owe half
 
amiafool said:
Hi,
i know there are lots of "calculators" out there advising how much you have to repay on mortgages etc.

However, I'm trying to find out if the following is accurate
You borrow 400,000
Term 25 years
Intrest Rate 3.5%

Calculating repayment as follows???

400,000 divided by 3.5% gives you a years repayment
a years repayment divided by 12 gives me a monthly repayment

Or what am i leaving out - i'm not that clever!!

Thanks,
Click to expand...

This will give you you intrest payments - which will not reduce you capital and therefore will be the same for ever - i.e. no 25yrs!

You can use the likes of: "Karl Jeacle's Mortgage Calculator" (google it) to work out the payments and has great features for exploring overpayments, lump sum payments...

Based on your figures above you are looking at repayments of €2,002.49 p/m.

Break down of P&I from calc (its in dollars, but numbers are the same):

YR Intrest Principal Balance
2010 $12,698.07 $9,329.32 $390,670.68
2011 $13,505.71 $10,524.17 $380,146.51
2012 $13,131.39 $10,898.49 $369,248.02
2013 $12,743.77 $11,286.11 $357,961.91
2014 $12,342.36 $11,687.52 $346,274.39
2015 $11,926.69 $12,103.19 $334,171.20
2016 $11,496.21 $12,533.67 $321,637.53
2017 $11,050.43 $12,979.45 $308,658.08
2018 $10,588.77 $13,441.11 $295,216.97
2019 $10,110.71 $13,919.17 $281,297.80
2020 $9,615.65 $14,414.23 $266,883.57
2021 $9,102.99 $14,926.89 $251,956.68
2022 $8,572.09 $15,457.79 $236,498.89
2023 $8,022.29 $16,007.59 $220,491.30
2024 $7,452.95 $16,576.93 $203,914.37
2025 $6,863.36 $17,166.52 $186,747.85
2026 $6,252.80 $17,777.08 $168,970.77
2027 $5,620.52 $18,409.36 $150,561.41
2028 $4,965.77 $19,064.11 $131,497.30
2029 $4,287.71 $19,742.17 $111,755.13
2030 $3,585.54 $20,444.34 $91,310.79
2031 $2,858.40 $21,171.48 $70,139.31
2032 $2,105.39 $21,924.49 $48,214.82
2033 $1,325.62 $22,704.26 $25,510.56
2034 $518.09 $23,511.79 $1,998.77
2035 $5.83 $1,996.66 $2.11

I would recommend you play around with this as it will give you a great insite into *what* you are actually paying...

For example: you are paying over 200k in intrest over 25 years, but if you could afford to reduce the term to 20 years, you would only be paying 156k (mind you your monthly repayments increase to €2319.84). I find it very useful to look at the raw data it provides.

- NOTE: I have no association with the above, but find it very useful.

All the Best.
 
If you have excel click on the fx icon then select financial then PMT
A small window open and yon then enter the details

For Rate enter the interest rate ie 4%/12
Nper: Number of payments I'e number of years * 12 i.e. 20*12
PV Enter the mortgage amount
FV enter 0
Type enter 0
 
I could not edit my post as its been > 24hrs - so I have replied...

salvidor said:
Break down of P&I from calc (its in dollars, but numbers are the same):

YR Intrest Principal Balance
2010 $12,698.07 $9,329.32 $390,670.68
2011 $13,505.71 $10,524.17 $380,146.51
2012 $13,131.39 $10,898.49 $369,248.02
2013 $12,743.77 $11,286.11 $357,961.91
2014 $12,342.36 $11,687.52 $346,274.39
2015 $11,926.69 $12,103.19 $334,171.20
2016 $11,496.21 $12,533.67 $321,637.53
2017 $11,050.43 $12,979.45 $308,658.08
2018 $10,588.77 $13,441.11 $295,216.97
2019 $10,110.71 $13,919.17 $281,297.80
2020 $9,615.65 $14,414.23 $266,883.57
2021 $9,102.99 $14,926.89 $251,956.68
2022 $8,572.09 $15,457.79 $236,498.89
2023 $8,022.29 $16,007.59 $220,491.30
2024 $7,452.95 $16,576.93 $203,914.37
2025 $6,863.36 $17,166.52 $186,747.85
2026 $6,252.80 $17,777.08 $168,970.77
2027 $5,620.52 $18,409.36 $150,561.41
2028 $4,965.77 $19,064.11 $131,497.30
2029 $4,287.71 $19,742.17 $111,755.13
2030 $3,585.54 $20,444.34 $91,310.79
2031 $2,858.40 $21,171.48 $70,139.31
2032 $2,105.39 $21,924.49 $48,214.82
2033 $1,325.62 $22,704.26 $25,510.56
2034 $518.09 $23,511.79 $1,998.77
2035 $5.83 $1,996.66 $2.11
Click to expand...

I have reformatted the above using
tags - there is a post in how to use AAM giving an overview of these:

YR|Intrest|Principal|Balance
2010|$12,698.07|$9,329.32|$390,670.68
2011|$13,505.71|$10,524.17|$380,146.51
2012|$13,131.39|$10,898.49|$369,248.02
2013|$12,743.77|$11,286.11|$357,961.91
2014|$12,342.36|$11,687.52|$346,274.39
2015|$11,926.69|$12,103.19|$334,171.20
2016|$11,496.21|$12,533.67|$321,637.53
2017|$11,050.43|$12,979.45|$308,658.08
2018|$10,588.77|$13,441.11|$295,216.97
2019|$10,110.71|$13,919.17|$281,297.80
2020|$9,615.65|$14,414.23|$266,883.57
2021|$9,102.99|$14,926.89|$251,956.68
2022|$8,572.09|$15,457.79|$236,498.89
2023|$8,022.29|$16,007.59|$220,491.30
2024|$7,452.95|$16,576.93|$203,914.37
2025|$6,863.36|$17,166.52|$186,747.85
2026|$6,252.80|$17,777.08|$168,970.77
2027|$5,620.52|$18,409.36|$150,561.41
2028|$4,965.77|$19,064.11|$131,497.30
2029|$4,287.71|$19,742.17|$111,755.13
2030|$3,585.54|$20,444.34|$91,310.79
2031|$2,858.40|$21,171.48|$70,139.31
2032|$2,105.39|$21,924.49|$48,214.82
2033|$1,325.62|$22,704.26|$25,510.56
2034|$518.09|$23,511.79|$1,998.77
2035|$5.83|$1,996.66|$2.11
 
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