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I am trying to calculate the amount of interest I need to pay for a mortgage that just turned from fixed to floating.

  • Current balance is: -550,000
  • Interest rate: 5.95%
  • Original term: 30 years

The monthly interest is calculated as:

  • 550000*0.0595/12 = 2727.08333

The fortnightly interest is calculated as:

  • 2727.08333/2 = 1363.54

Was I correct?

  • 3
    Looks fine, but there are 26 fortnights in a year, not 24. – Hart CO Mar 15 '18 at 20:19
  • @HartCO, thanks for pointing it out. My assumption was wrong. – Yu Zhang Mar 15 '18 at 20:25
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    So yours was semi-monthly rather than bi-weekly, both are somewhat common alternatives to monthly mortgage payments. – Hart CO Mar 15 '18 at 20:37
  • You will save a lot of money if you convert that to a conventional mortgage, unless you have really poor credit scores. – Norm Mar 16 '18 at 19:28
  • @Norm, conventional mortgage? Did you mean fixed mortgage. – Yu Zhang Mar 16 '18 at 20:31

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