How much is interest how much is capital?

discostu1978

Hi

Can anyone help me work out how much of my monthly mortgage payment is comprised of interest, and how much goes against capital for my new mortgage.
It is £252,000, over 30 years, 5.75%. Monthly payment £1475 (ish).

I've looked on the net for ages, and can't find out!

Many thanks
Tony

Mr_helpful

Thats because it changes every month in the early years you pay very little capital on a 25 yr mortgage you have paid around 1/20th of the capital after 5 yrs or 15th of the term. at the end your payment is much more capital.

discostu1978

I realise that - but i want to know how much capital/interest in the first year - sorry should have been more specific!

payless

IN the first year at that rate/ term / assuming daily calculation on a repayment basis - the payments are split roughly 80% interest & 20% capital
( taken from a recent illustration for similiar but not exactly same situation)

Most lenders or brokers can provide an exact calculation

Mr._Nice

For a 5.75% mortgage (assuming they aren't screwing you with annual interest calculation, daily or monthly comes out the same for fixed monthly payments) of 30 years, you will have 98.7% of the capital outstanding after one year.
In your case, that would be £248,758.
So you will have payed £1470.60*12=£17,647.20, comprising £3242 capital and £14405 interest.
That all came from a quick bit of excel.

discostu1978

Many thanks!
Scary stuff!
Luckily we can make unlimited over payments straight off the capital with this one (Northern Rock) - well thats my understanding of it!

AndrewSmith

discostu1978 wrote: »

Hi

Can anyone help me work out how much of my monthly mortgage payment is comprised of interest, and how much goes against capital for my new mortgage.
It is £252,000, over 30 years, 5.75%. Monthly payment £1475 (ish).

I've looked on the net for ages, and can't find out!

Many thanks
Tony

Month one

Interest = £1207.50
Capital = £263.11

Month 12

Interest = £1193.30
Capital = £277.31

Month 60 (5 years)

Interest = £1121.77
Capital = £348.83

Month 180 (15 years)

Interest = £851.54
Capital = £619.06



Hope that helps, it assumes that the rate of 5.75 is constant

Andrew

Mr_helpful

Of course if you look at the back page of the KFI it should be on there

Bargain_Rzl

So what's the formula?

For the sake of setting up my own daily spreadsheet, if I have an annual interest rate of 4.89% (as per my current fix) how do I work out the daily rate?

Once I've got that, my spreadsheet will work...

Edit: sorry - meant the split of capital/interest. Not the daily rate - that's easy

Ohhhh hang on - think I'm getting the hang of it now...

Bargain_Rzl

Nope, I give up

I can't work out how daily interest compounds over the course of a year to result in my annual interest rate.

Anybody enlighten me with a formula for calculating daily interest from an annual compounded figure of 4.89% per annum?

I am soooo close to having a whizzy spreadsheet

Thanks!

Leon_W

Most brokers will have calculators built in to software they are using so it's not a calculation that I am not an expert on (you have to be aware that not all lenders use the same calculations either!).

Anyway, found this on the web for you.....

http://www.dailydoseofexcel.com/archives/2004/06/16/amortization-table/

If it's of no use then don't ask me what the hell they're on about on this page as I haven't got a clue.