mortgage formula

  • Thread starter Thread starter Ron
  • Start date Start date
R

Ron

Hi, is this the correct formula to calculate mortgage interest on an
interest only mortgage?
=SUM((B3*B4)/12)*-1 where B3 is the mortgage and B4 is the interest rate.
Thanks Ron
 
You don't need the sum, and you don't need to multiply by -1, and assuming
that the interest is calculated annually, then

=-(B3*B4)/12

--

HTH

RP
(remove nothere from the email address if mailing direct)
 
Bob Phillips said:
You don't need the sum, and you don't need to multiply by -1, and assuming
that the interest is calculated annually, then

=-(B3*B4)/12

--

HTH

RP
(remove nothere from the email address if mailing direct)
Click to expand...

Hi thanks for the quick reply however I have just had a notice from my
mortgage company, as the interest rate is decreasing and their calculations
for a mortgage of £45397.72 and an interest rate of 5.6%, gives a monthly
payment of £210.91, whereas my formula gives £211.83. They must use a
different formula.

As there is a shortfall in my endowment I was trying to find out the
difference in paying money into my mortgage account as against using an ISA
to make up the shortfall.



Ron
 
Are you sure it is 5.6%, not 5.575%.

--

HTH

RP
(remove nothere from the email address if mailing direct)
 
What is the amortization period of the mortgage and the conversion periods (i.e. is the
rate compounded monthly/semi annually...).
 
RWN said:
What is the amortization period of the mortgage and the conversion periods
(i.e. is the
rate compounded monthly/semi annually...).
Click to expand...

Does it matter what the amortization period of the mortgage is on an
interest only mortgage? It has about 6 years left until the first endowment
is paid. The interest is calculated daily. I wondered why the mortgage
company had a different monthly payment from me. As I said in an earlier
post they must use a different formula.
Ron
 
I'd go with Bob's suggestion that the rate is probably 5.575%. On your
document, I would think they've used 5.6% as a convenience. As the actual
rate used seems to be lower, you're not losing :-)
 
the formula stands correct you need to add decimal points to it that
all and format the cell property to currency....

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