How much of mortgage payment is Capital?

rhionm

Hi

Im trying to work out how much of a mortgage I will have left in 2 years time?!

Im a FTB and have today taken out a 2year fixed @ 4.65% on a mortgage of £116,100 over 30 years. How can I calculate the amount I have paid off this mortgage at the end of the 2 year fixed period? Is there an easy (ish) way to do it on excel or similar?

Thanks a lot

AndrewSmith

Hi,

At the end of the 2 year fixed period assuming 24 months paid on time, your balance would be roughly £112,365.88

Hope this helps

Andy

EdInvestor

Wow,how things have changed. When I bought my first flat, after two years you'd owe more than you started with because of the humungous interest rates at the time.

AndrewSmith

Calculated thanks to my trusty Casio FC-100 financial consultant calculator.

She is nearly 11 years old but boy does she earn her money. Has every financial calculation you could ever think of.

I call her my 'leathal weapon'

rhionm

wow thanks!! :T

how did you calculate that? just interested to know the method!!!

homer_j_3

you need a lethal weapon and if like my calculator, probably a whole load of patience!!!

AndrewSmith

rhionm wrote:

wow thanks!! :T

how did you calculate that? just interested to know the method!!!

I just hit about 8 buttons on my calculator, which works it out for me. Cheating I know

Bernard_Coleslaw

AndrewSmith wrote:

I call her my 'leathal weapon'

Andrew, that's ever so slightly scary. :eek:

Joe_Bloggs

I can hit eight buttons at once with my head. Unfortunately my calculator is solar powered. I am an excel novice and can only use open office calc at home.

From my point of view the thing you need to find out is the payment for the mortgage at the interest rate over term. This can be calculated with the PMT function. (acronyms are often recycled. )

PMT(Rate; Number of payments; Present Value; Future value =0;Type =0)
Try to make the rate match the number of payments. Eg if monthly interest is assumed the monthly interest should be the rate (4.74%/12) and the Number of payments 30*12 = 360. The future value is 0 if you paid it off at the term. The type =0 is when interest is paid in arrears on capital, a 1 would be for interest paid at the start of the repayment period.
I get -586.51 for PMT.
Next you can use the future value function FV to determine how much is left on the mortgage.

FV(Interest rate, number of payments = 24 (2 years) ,PMT,Type as before)
Match up the rate and the payment frequencies and PMT.
No need to change the sign of anything and I get FV = -112,434.98

There may be a quicker, more informed way. You can do your own monthly or daily calculations but they can be a bit of a drag in the downwards direction.
J_B.

Coupon-mad

Joe_Bloggs wrote:

PMT(Rate; Number of payments; Present Value; Future value =0;Type =0)
Try to make the rate match the number of payments. Eg if monthly interest is assumed the monthly interest should be the rate (4.74%/12) and the Number of payments 30*12 = 360. The future value is 0 if you paid it off at the term. The type =0 is when interest is paid in arrears on capital, a 1 would be for interest paid at the start of the repayment period.
I get -586.51 for PMT.
Next you can use the future value function FV to determine how much is left on the mortgage.

FV(Interest rate, number of payments = 24 (2 years) ,PMT,Type as before)
Match up the rate and the payment frequencies and PMT.
No need to change the sign of anything and I get FV = -112,434.98

J_B.

:eek:
Now you've really scared me! No wonder I stopped working as a Mortgage Manager when I had my kids, I don't like all this figurework!

Must... go... and... lie... down.....

Joe_Bloggs

Michael Kelly in his free ebook 'Mortgages Exposed' gave me confidence and direction in how to do financial calculations mathematically and then with spread sheets.
J_B.