Mortgage Payment Calculations

[Fran]

Does anyone know where I can find mortgages payment calculations?

A client needs a calculation for monthly repayments for interest only and repayment mortgages from the input parameters of loan amount, term and interest rate.

Any ideas?

[DBA_bloke]

Try this.

[blazzar]

Here is a good link, you will need to sanity check for UK version (ie check against halifax or other mortgage calcs online)

[MrRobin]

You can simply use Excel for these type of calculations.

The PMT function will calculate a monthly payment as follows:

=PMT(Rate,NPer,Pv,Fv)

Where Rate is your rate per period of payment (i.e. APR/12 for monthly)
NPer is the number of periods (i.e. 300 for a 25 year mortgage)
Pv is the original mortgage amount
Fv is the final amount (0 for a repayment mortgage, or -Pv for an interest only one)

HTH

[Fran]

Cheers all, I really need the formula to put in my code to add the function to my own app.

Cheers DBABloke, I'll check it out

[MrRobin]

OK... formulas...

For an interest only mortgage, this is easy the repayment is just

rate x mortgage amount -- i.e. 5%/12 x £500k = £2083/month

For repayment it is

rate x amount
----------------
1 - 1/(1+rate)^n



Have a look here

[Fran]

FANTASTIC!

10 gold stars coming your way

[Fran]

For repayment it is

rate x amount
----------------
1 - 1/(1+rate)^n

Can you give me an example as you did for interest only mortgage payments.

I'm confused!

[MrRobin]

Yeah sure. You have:

5%/12 * £500k (as before) = 2083 as the nominator

and

1 - 1/(1+5%/12)^300
= 1 - 1/3.48 = 0.713 as the denominator

where 300 is the number of months in a 25 year mortgage

2083 / 0.713 = £2922 / month

Which corresponds to the results given in the links as posted by the other peeps.

[Fran]

Thank you!!