Mortgage Calculation Conondrum! Help!

strawberries1

I'm trying to calculate the difference between the following please.

Loan £175,200 20yrs

1.29% fixed for 5years +£900 fees and

1.74% no fees.

Is there any link to calculation sites that can help?
I'll like to know the differnce in cost.

Thanks.

TrickyDicky101

I tend to use Excel for these calculations but any mortgage calculator will in principle work.

You need to add the fee onto the mortgage balance required (so you comparing two different mortgage starting balances between fee inclusive and fee free deal).

Assuming repayments are made in arrears (typical with mortgages provided by banks and not building societies/ex-building societies) I make it that Fee inclusive deal will cost you £687.05 per month for 5 years after which you will have an outstanding mortgage balance of £145,268.

Fee-free you will have monthly payments of £720.62 and after 5 years will have mortgage balance outstanding of £145,973.

This would make it beneficial to go with the fee inclusive deal.

getmore4less

JUst use a regular calculator

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

add the fees make the payments the same and see what's left in 5 years

the rough interest only calculation is the easy one difference in rate * amount owing * years.

£175,200 * 0.0045 * 5 = £3,937.50 less the 900 fee still over £3k

it will be less than that on repayment

paying £720pm(25yr ish) in 5y

£176,100 @ 1.29% £720pm £143,227
£175,200 @ 1.74% £720pm £146,012

saving £2,785

paying £1,500pm(10yish full term) in 5y

£176,100 @ 1.29% £1,500pm £94,911
£175,200 @ 1.74% £1,500pm £97,153

saving £2,242

strawberries1

Thanks guys!

Here's what I came up with :
1.74% : £864.44 x 62months = £53,595.28
1.29% : £832.86 x 61months = £50,804.46
Difference is £2790.82
- £900 = £1,8908.2 (- £864.44=£1,026.38)

It appears the differnce is £1,026.38 have I done this correctly?

TrickyDicky101

You've used a 20yr total term rather than a 25yr total term. I'm not sure why you have a difference in number of payments - you should be comparing like for like so 60 payments each (or 61 payments each or 62 payments each).

You need to compare what you will owe on the mortgage under each scenario at the end of the 5 years (or fix period if it is more/less than exactly 5 years) rather than simply just how much cash you have forked out in the period.

getmore4less

strawberries1 wrote: »

Thanks guys!

Here's what I came up with :
1.74% : £864.44 x 62months = £53,595.28
1.29% : £832.86 x 61months = £50,804.46
Difference is £2790.82
- £900 = £1,8908.2 (- £864.44=£1,026.38)

It appears the differnce is £1,026.38 have I done this correctly?

that's just the payments you need to include whats left after the period.

strawberries1

There're two offers. 1.74% for 62months and the 1.29% is 61months. However I minused one month after the calculation.

I total amounts to be repaid under 1.74% £230,692 and 1.29% 228,779.92 = 1,912.08 - 900(fee)

Comparing what's left ater the periods the difference is further 878.74.

getmore4less

Ignore the total paid no use to compare over the 60-52 months.

A month is (£175k* 0.0045 /12 £65 difference over 5 years you can ignore the odd month unless it is tight.

You are well over £2k up after 5 years on the lower rate