LTV ratio question for the mathematically challenged!

PositiveBalance

Hello everyone,

I have a really daft question to ask. The type of question that probably means I'm not safe to be let out on my own to buy a house...

I'm looking to buy a house for £95,000 with a 10% deposit meaning a mortgage of £85,500.

I'm trying to calculate how much I would have to pay back over a 2 year fixed deal at 3.54% to hit the 85% mark to get a better interest rate next time I fix. I've used to site calculator, but just want to double check my workings.

What do you guys think?

Many thanks! :T

amnblog

Assuming the value does not change, you would pay back half your original deposit of £9,500 = £4,750.

Taking the mortgage down to £80,750

PositiveBalance

amnblog wrote: »

Assuming the value does not change, you would pay back half your original deposit of £9,500 = £4,750.

Taking the mortgage down to £80,750

Thank you, amblog!

Is that counting the interest as well? That's where I get confused.

Based on what you have said and my mortgage repayments being £33.88pcm, if I have divided correctly I should have repaid that much back in just over 13 months so I should hit that target easily.

Thanks very much! :A

HappyMJ

PositiveBalance wrote: »

Thank you, amblog!

Is that counting the interest as well? That's where I get confused.

Based on what you have said and my mortgage repayments being £33.88pcm, if I have divided correctly I should have repaid that much back in just over 13 months so I should hit that target easily.

Thanks very much! :A

You need to be paying around £450 per month in total to hit your target in 2 years.

PositiveBalance

HappyMJ wrote: »

You need to be paying around £450 per month in total to hit your target in 2 years.

Thanks. I think I had figured something like that but it's hard to be sure you are right when taking into account the interest.

HappyMJ

PositiveBalance wrote: »

Thanks. I think I had figured something like that but it's hard to be sure you are right when taking into account the interest.

It's only approximate anyway. I did £4,750 divided by 24. Then £85,500 times 3.54% divided by 12. Then add the 2 figures together.

PositiveBalance

HappyMJ wrote: »

It's only approximate anyway. I did £4,750 divided by 24. Then £85,500 times 3.54% divided by 12. Then add the 2 figures together.

Fair enough. Thanks for the formula and the honesty! :beer:
If there are any mathematical geniuses randomly out there with the exact answer, I won't stop you from showing your prowess!

jacobtheamish

Based on 25 year term
End of year one - £8,333.34
Year two - £81,088.71
Year three - £78,763.33

I have a excel spreadsheet with amortisation calculated.

Sorry if I've missed the point

PositiveBalance

Thanks jacobtheamish!

Sorry I didn't say that sooner, but things have been mad sorting the house out.

My mortgage term is 35 years but I am hoping to OP. What is/are the formula(e) for amortisation, please, so I can calculate it myself taking into account the OPs?

libf

If interest is calculated daily then it's not just a calculation, it's one for everyday of the two years. I use Excel to get something based on the daily interest rate and the number of days in the month, but there are a lot of online calculators to do it for you.

http://www.calculator.net/amortization-calculator.html or Google for one that has graphs/whatever in a format that you like.

getmore4less

PositiveBalance wrote: »

Hello everyone,

I have a really daft question to ask. The type of question that probably means I'm not safe to be let out on my own to buy a house...

I'm looking to buy a house for £95,000 with a 10% deposit meaning a mortgage of £85,500.

I'm trying to calculate how much I would have to pay back over a 2 year fixed deal at 3.54% to hit the 85% mark to get a better interest rate next time I fix. I've used to site calculator, but just want to double check my workings.

What do you guys think?

Many thanks! :T

Just use a simple calculator

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

purchase £95000
90% £85500 mortgage
85% £80750 target in 2 years

set to interest only
Mortgage
rate
2year term

Adjust payment till the amount owing is £80750

£444.

The full term is not that relevant as it is the payment that determines the amount owing over time.

Take a longer term and adjust with overpayments gives more flexibility.

For irregular overpayments you can iterate or just keep ahead of the average required £444pm.