Help! how do i calculate monthly payments?

ba'heid

Hi folks, newbie here hope this is not a stupid question.

I am looking to remortgage but when making comparisons how do I arrive at a monthly payment?

I have an outstanding mortgage of £70,641

£48,000 of this is interest only (covered by endowments ) the rest is repayment.

I have been calculating as follows

eg. 70,641 at 4.69 %

70,641 x 4.69 = 331,306.29/100 = 3313.06

divide by 12 = 276.08 per month

I hope i'm not being too thick here but whenever I get a quote my monthly payments are much more than the figure I arrive at. Can anyone help me with the calculation? I'm obviously going wrong somewhere but unsure where.


Thanks for any advice

Mikeyorks

The £276 is interest only, as you say. But £22,641 of your Mtge is repayment - so you have to divide that by however many months the repayment term has left. Add that to the £276 - and you should be closer??

AndrewSmith

TO calculate the repayment element I need to know the term over which you are paying the mortgage.

Your calculation is showing the interest only.

Andy

shockingmoment

sent you spreadsheet - need excel.

If you get #name error - goto tools, addins, tick the Analysis Toolpack box to load the functions

Uses Cumprinc and Cumipmt functions

Works out true mortgage costs for 20 and 25 year terms

ba'heid

Thanks for all replies.

Shockingmoment thanks for spreadsheet, unfortunately I only have MS works
for spreadsheets.

Andy I have 16years 8months left on mortgage term hope this helps.


Thanks again

MR_G

shockingmoment wrote:

sent you spreadsheet - need excel.

If you get #name error - goto tools, addins, tick the Analysis Toolpack box to load the functions

Uses Cumprinc and Cumipmt functions

Works out true mortgage costs for 20 and 25 year terms

---

Can you send me the same spreadsheet please :A

infobank

Go here:
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

then do it like this:
70641 - 48000 = 22641
put 22641 in the "mortgage required" box
put the remaining years to go on the mortgage in the "repayment period" box
put your 4.69 in the "interest rate" box
Press calculate
In the box that says "monthly repayment" will be the monthly payments on the "capital and interest/repayment" part of your mortgage.

For the other 48000 you can either use the same calculator or ....
48000 x 4.69% = 2251
divide it by 12 = 187.6

add the 187.6 to the figure from the bbc calculator to give you your monthly repayment figure for the combined parts of your mortgage.
It will probably not agree with what your lender says, but should be very close indeed (i.e. within a £5 ?)

infobank

Just spotted your term of 16 yrs 8 months so ... use 17 yrs
back to the BBC calculator
163.5 + 187.6 = £351.10 per month

Its just a question of splitting in to 2 parts the interest only part from the repayment part, then work out each using the calculator, then add the results back together again.

infobank

If you are simply looking for comparisons to decide which is going to be the cheapest per month, you only need to look at the interest rate.
However, to get a true comparison other factors have to be considered.
For instance a lender with a market leading "beat that if you can" really low interest rate, may then charge a high arrangement fee to get it, a high survey/valuation fee,legal fees and an exit fee to leave them.
On the other hand, a lender with a higher interest will show up badly on a straight rate comparison, but give free valuation,surveys and legal fees, with no exit fee when remortgaging again in a few years time.
Rate is a factor, but not the only one.
If in doubt go to Nationwide, they are a mutual and have a really good reputation among brokers in the know for "good all in deals"
(the brokers may criticise them for poor administration, but that probabaly only applies in ab few isolated cases, and all lenders are bad at admin !)