Interest v repayment - Help needed

mick_1967

How do you work out how much you pay eg:
£100k mortage on interest only at 5% = £5000 / 12 = £416.66 per month.

How can I manually work out on £100k at 5% on a repayment mortage? I know there are tools avaialble, just wondered how to calculate myself the increased amount from interest only to repayment.

Cheers Mucho.

HarrowArrow

Here's an example I dug up from the inter-google...replace with your figures - note that "^-25" means "to the power of -25", which you'll find on any advanced calculator.

Suppose a Building Society lends £50,000 over 25 years and charges a borrower 6% pa compounding annually. What is the monthly repayment?
The annual payment is: -
50,000 x (0.06 / (1 - (1 + 0.06)^-25) = £3,911.34 per annum.
Dividing by 12 gives us £325.94 per month.

redpete

monthly amount = (r / (1-(1+r)^-N))P

r = monthly interest rate
N = number of monthly payments
P = amount borrowed

or something like that - you can see why there are tools and spreadsheet functions to do it for you.

HarrowArrow

redpete wrote: »

monthly amount = (r / (1-(1+r)^-N))P

r = monthly interest rate
N = number of monthly payments
P = amount borrowed

or something like that - you can see why there are tools and spreadsheet functions to do it for you.

It was virtually impossible when there was tax relief on the first 30k!!!:eek::D

mick_1967

ta - i dont have an scientific calculator to hand and was trying to work it out on a basic calc and having no joy.

HarrowArrow

mick_1967 wrote: »

ta - i dont have an scientific calculator to hand and was trying to work it out on a basic calc and having no joy.

There's an advanced calculator on your computer - open Calculator tool under Start>Programs>Accessories, click View than choose Scientific, I'm assuming you're not using a Mac....:D

getmore4less

Much easier to just use a calculator

http://www.whatsthecost.com/mortgage.aspx

HarrowArrow

getmore4less wrote: »

MUch easier to just ue a calculator

http://www.whatsthecost.com/mortgage.aspx

Agreed for one-offs, though the formula is nice to have on a spreadsheet as you can then put in lots of different inputs (different % and term) and compare the answers neatly in different rows....