Mortgage interest rate v admin fee

getmore4less

There are a number of correct ways to do the calcs and loads of wrong ones.

One of the easiest where the promotional terms are the same.( eg: 2 5y fixes)

for each loan

Add the fees to the loan
get an estimate of the monthly payment.

Then make the monthly payment the same for all loans.
work out the amount left at the end of the period.

the one with the lower amount owing is the cheapest.


for deals where there are variable interest components you have to start making guesses but can still do some estimates to identify the cost of the risk.
(eg comparing a 3y and 5y fix)

The advantage of the above method is you can use any simple mortgage calculator to do the amount owing.

http://www.whatsthecost.com/mortgage.aspx
in two tabs
put the normal numbers in first to get the estimate of monthly payment

then set both mortgages to interest only set the payment
change the term to the length of the deal and calculate the amount owing.

NOTE: contrary to what some will say paying the fees upfront makes no difference.

Yorkie1

Please click 'spam' on Vonda's post - 10 identical posts promoting the same book.