Thursday, January 25, 2007

FAQ Series: How Do I Compute Monthly Amortization?

How to compute:

Multiply loan amount by factor rate depending on loan term. It is assumed that each of the following is true:

  1. Age does not exceed 70 at the end of loan term.
  2. up to 300k loan=6%; to 500k=7%; to 1M=10.5%; to 2M=11.5%

Loan Amount ranges from 70-80% of the total contract price so if you will have a 1M loan, that means you will base your computation under the 10.5% column.

Example: Loan=1M, term=5 years. Multiply 1M by 0.021494 and you get 21,494/month.

Loan Term6%7%10.5%11.5%
5 years0.01933280.01980120.0214940.0219927
10 years0.01110210.01161090.0134940.014059
15 years0.00843860.00898930.0110540.0116819
20 years0.00716430.0077530.0099840.0106643
25 years0.0064430.00706780.0094420.0101647
30 years0.00599550.00665310.0091470.0099984

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