Mortgage tools - how do I work out payment after deal ends?

Legacy_user

I am looking at moving home and I am looking at a 20 year mortgage on £60k.

I like a Nationwide 3 year tracked which is 1.69% for 3 years then their SMR of 3.99%

At this stage, I want to do a lot of maths and not speak to their advisors. I want to work out how much the monthly payment will be at 3.99% in 3 years time.

Can anyone help? Can I use the MSE tools to help me?

I know that the rate could go up.

(on another note, I need to know if the SMR will rise when the base rate rises and what the relationship is with the base rate).

getmore4less

just use a simple calculator

I use.

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

stick the numbers in see how much is left in 3 years

use that to do a second calculation with the new data(rate and 3y less on the term)

if the rates don't change
£60k 20 years 1.69% £295pm in 3 years £52240 17 years 3.99% £353pm

System

Thanks

I have discovered :j the Excel PMT function and sorts out the "what is my monthly payment problem.

But how does the SME tool (and others) work out the remaining debt. It is not as simple as just deducting the monthly payment for every month in the period because that approach gives you a much lower remaining debt that the MSE calculator.

Maelwys

moneyunwise wrote: »

But how does the SME tool (and others) work out the remaining debt. It is not as simple as just deducting the monthly payment for every month in the period because that approach gives you a much lower remaining debt that the MSE calculator.

You'll need to take into account the interest rate on the capital you owe, and THEN subtract your monthly payment from the (capital + interest) for the month.

That should give a pretty accurate figure, which might be just slightly out depending on whenever the lender calculates interest (daily I'd assume...)

getmore4less

Amortization is the term you need to research/understand.

Or just use a tool that has it built in like the one I showed you.

TrickyDicky101

moneyunwise wrote: »

Thanks

I have discovered :j the Excel PMT function and sorts out the "what is my monthly payment problem.

But how does the SME tool (and others) work out the remaining debt. It is not as simple as just deducting the monthly payment for every month in the period because that approach gives you a much lower remaining debt that the MSE calculator.

The Excel FV function will calculate the remaining balance after the 3 years. Using your cited example:

=FV(Rate,No. Payments,Payment Amount,Present Value)

=FV(1.69%/12,36,-294.80,60000)

=52,239.60

The Payment Amount above is what the PMT function will have returned for you.