Questions tagged [amortization]

any question related to the amortization of loan. Also refered to as EMI or repayment schedule

Filter by
Sorted by
Tagged with
39
votes
7answers
97k views

Why do banks want you to pay off interest before principal?

When you take out a traditional mortgage the first payment you make to a bank pays off mostly interest and then later payments start paying off principal. What is the reason for this? Is it just a ...
12
votes
1answer
2k views

What is the difference between an amortized loan and a non-amortized loan?

As an example, my parents told me that their current car loan is amortized. Does that make any practical difference to how they pay off their loan, as opposed to if their loan had not been amortized?
12
votes
2answers
5k views

Treatment of web domain ownership & reselling for tax purposes: Capital asset, or not?

I run a web publishing business. I buy a large number of domains — and occasionally sell one, although not frequently. Some domains are developed into websites, which bring in advertising ...
10
votes
6answers
6k views

Why making additional payment to mortgage counts towards principal? Why does it matter?

When it comes to mortgage advice, some people recommend making an extra payment. The logic is :"These extra payments are automatically applied to your principal, not interest". Why does it matter if ...
10
votes
1answer
7k views

Why are my auto loan payments calculated differently than my mortgage payments?

Last year I got a home loan that follows the standard Rule of 78s amortization schedule. I can easily predict how much of my mortgage payment will go to interest and how much to principal. A few ...
7
votes
1answer
3k views

What is the typical compounding/amortized period on US mortgage loans

In a different question it is stated that Mortgages are compounded .. 12 times a year in the USA Is this true or just applicable to that question? I am looking at a site where it explains how to ...
7
votes
4answers
7k views

How do amortization schedules work and when are they used?

Specifically, I notice that on a mortgage statement, my payment is "amortized" so that at the beginning of the loan, I am paying almost entirely interest and very little principal. However, on a ...
6
votes
4answers
8k views

How do I calculate the principal paid down on a mortgage?

I'm looking for an equation to find out the current principal on a mortgage. I have the following variables: n periods monthly payment amount interest rate of mortgage I'd like to know how much I'd ...
5
votes
6answers
70k views

If I put a large down payment (over 50%) towards a car loan, can I reduce my interest rate and is it smart to even put that much down?

I've saved a lot but not enough money for a car... I am looking to buy a nissan versa which is ~13000 out the door. I have ~11000 that I can put towards a down payment so I am just shy of the full ...
5
votes
6answers
2k views

How does paying extra on my mortgage affect my amortization schedule?

I am a first time home buyer and have some spare cash after my home purchase to pay forward quite a bit of money (cash was not available during actual purchase, so, no, I could not have put it towards ...
4
votes
3answers
547 views

How do I calculate APR from monthly instalments?

I have been given a quote for a car loan in Thailand. I want to calculate the APR but am not sure how. (All of the tools and explanations I’ve seen are going in the other direction, from a percentage ...
4
votes
2answers
303 views

Mortgage principal reduction

For a 30-year mortgage that started less than a year ago, how much will the monthly payment be after making an additional $100,000 payment towards the principal? The mortgage currently has a balance ...
4
votes
2answers
3k views

How to recalculate an amortization table after making a large payment?

I have an auto loan I wish to apply a very large amount to. I have a amortization table that shows me details for each payment I make. Here's where it gets complicated... My lender does not allow ...
4
votes
3answers
8k views

How do I calculate interest on a personal loan with irregular withdrawals and payments?

Several years ago, I loaned money to a family member. They borrowed different amounts at irregular intervals. They are now beginning to repay, so I want to establish exactly how much they owe. I have ...
4
votes
1answer
363 views

I own the condo but not the (13 year old) mortgage. What should I do?

This was my mother's home in Florida. She died and left it to me via ladybird deed. It has about $40,000 equity. I have been paying the mortgage out of my bank account for years - since long before ...
3
votes
2answers
2k views

Credit Card Amortization via Principal-Only Payments

On a home loan amortization schedule, I can make the monthly payment and add the principal-only owing for the "next" payment along with it, and avoid paying the interest for that next month, which ...
3
votes
2answers
597 views

What is the math used to calculate the impact that overpaying a mortgage has an an amortization table?

I'm in the classic 'pay extra on the house vs invest' argument with my partner (not the subject of this question) and I'm trying to understand what exactly happens when I pay extra on a mortgage. I ...
3
votes
2answers
2k views

Calculating amortisation payment amount, where first payment date differs from loan start date

I'm trying to reproduce the schedule, but I cant seem to get the same Payment and Interest for each month. The tricky part here is that the Loan start date is 9 Feb 2017 but the first payment is only ...
3
votes
6answers
160 views

What is a fair way to split the profits for a co-owned property?

Seeking out some financial guidance... My partner and I recently purchased a home with my sister and brother-in-law. All spaces will be shared with the exception of bedrooms. We will be meeting with ...
3
votes
2answers
2k views

How inflation factors into a loan amortization schedule

I've been looking at a lot of loan amortization schedules for mortgages lately and wonder how they relate to real dollars over time with inflation. The calculators I've been using have a calculated ...
3
votes
2answers
439 views

Mortgage change of terms (lower rate) increases payment amounts

My bank now offers lower interest rates than what I got when I first started my mortgage. I called to see about changing my terms (lower rate, same payoff date), and they said it would actually ...
2
votes
4answers
333 views

Do extra mortgage payments typically go directly towards principal?

I have a 30 year mortgage and I'd like to make extra payments each month to speed up the amortization schedule. I thought this would be better than taking out a 15 year mortgage as it gives me some ...
2
votes
2answers
400 views

Partially vs. Fully Amortized Loan

Isn't the article beneath wrong to interpret a Fully Amortized Loan as a loan with 7 years maturity? Isn't the correct comparator a Fully Amortized Loan with 30 years maturity, and 30 years ...
2
votes
2answers
901 views

Chase bank is offering to refinance my mortgage at a lower rate: How much do I save?

Chase sent me a package in the mail telling me about this limited offer to refinance my mortgage. I don't know anything about this so I tried myself to run the numbers and was hoping someone could ...
2
votes
2answers
154 views

How can I amortize 4 rates over a 30 year term?

I've been offered a HELOC modification with the following terms: Beginning balance $148,148.59, Initial rate and term is 1% for 60 months at a pmt of $374.60, The 2nd term begins Jan of yr 6, at 2% ...
2
votes
1answer
70 views

Is the principle payment in an amortization schedule the amount that goes towards how much of the house you own?

When I first learned of amortization schedules I was confused by the division of payments into "interest" and "principle". I think I get it now: isn't it that the principle payment ...
2
votes
1answer
385 views

Term loan overpayment options: applied to principal, or…?

Twice in my life now (as of yesterday) I've found myself in a very confusion situation after having made higher-than-scheduled payments on a term loan for an extended period of time. The first time, ...
2
votes
3answers
1k views

Calculating interest accrued with extended Initial Payment Date

I'm wondering how do I calculate the interest accrued if the intervals aren't perfect. For example Principal - $100,000 Interest - 8% Compounding monthly Disbursal Date - January 1st, 2016 Initial ...
2
votes
1answer
692 views

Calculating the effect of prepaying your loan

I am asking about the mathematical formula, or constructing the amortized loan table, of the effect of someone prepaying their loan. According to this website, you'd calculate the monthly payment ...
2
votes
1answer
41 views

Calculating Interest with Compute Method as Canadian - Semiannual

i'm trying to validate a software Interest Calculation. The defaults given are as followed. Interval: Monthly Nominal Annual Rate: 10% Disbursal Amount: $500,000 Disbursal Date 01/01/2018 Payment ...
2
votes
1answer
426 views

Checking the math on a Truth-in-Lending Disclosure

Here is a shot of an actual Truth-in-Lending statement for a real home mortgage (mine). I'm trying to check the numbers but they seem slightly off: It's a 30-year fixed rate mortgage. The annual ...
2
votes
1answer
2k views

Seasonal Loan Amortization

Hi I can compute a Basic Loan Amortization Schedule, But now I'm trying to Calculate a Seasonal Loan Amortization Schedule . So for example A loan starts at January And Will go on for 3 years, with ...
2
votes
1answer
99 views

Loan Amortization with first payment period less than others

I'm trying to make loan amortization schedule where Interest rate is calculated on the exact period dates. (installment dates taking into account weekends and public holidays) and with the first ...
2
votes
2answers
132 views

Mortgage: Floating rate loan tenure extension on rate increase

I am trying to figure out how my bank has implemented re-pricing on my floating rate home loan. The original home loan was for an amount of ₹ 48 lakhs (₹ 4.8 Mn) at an annual rate of interest (RoI) ...
2
votes
1answer
155 views

Buy 1 bed flat via private sell (Edinburgh, UK) - opportunity?

I am renting a flat (1 bed + box room) with my partner in 'central' Edinburgh. We pay £675 pcm. Our landlady wants to sell it urgently and she asks for £160,000. She is keen to sell it to us. A ...
2
votes
1answer
68 views

Disposing of hardware item from current assets, is the reduction in assets posted to equity or special loss account?

I'm disposing of an old laptop that is broken and completely unusable. Let's say it was purchased for $1000 before taxes, already been accounted for in Current Assets since the date of purchase, and ...
2
votes
1answer
155 views

Reporting of amortization expenses to FTB California

I have registered a corporation in Californa. So far, there have only been start up costs and no income. I have lodged a Form 1120 with IRS and amortized the expenses over 60 months. Do I report the ...
1
vote
2answers
3k views

'principal balance' vs 'outstanding balance'

Is 'principal balance' same as 'Outstanding Balance'? My understanding is - In amortisation schedule, Outstanding balance gets reduced according to 'principal' portion of your monthly payment. After 6 ...
1
vote
2answers
170 views

Loan Amortization with Insurance

I'm wondering how does you calculate payment amount of the loan amortization schedule if insurance is involved. "Desjardins" insurance on loan is such that for every $1000 outstanding balance, you get ...
1
vote
1answer
161 views

How do equity, amortization, and market value factor into net profit on a sold house?

TL;DR: If I buy my first house at $500k using an FHA loan, and I want to eventually buy a $1MM home (with a conventional 20%-down loan), how do I calculate the time at which the sale of my first ...
1
vote
1answer
2k views

How to calculate amortization table with pro-rated first month

From what I understand, banks prefer to have loan payments due on the 1st of the month. To that end, if you close on a property on, say, the 15th, they will charge you a pro-rated payment to get you ...
1
vote
1answer
275 views

How to calculate what i need to pay each month in a annuity type of loan?

Good or bad, how do get to the same number as the bank web calculator do with the following data: Money loaned: 2 500 000 Interest: 3.5% Effective interest: 3.6% Fee (each payment): 50 Number of ...
1
vote
1answer
147 views

When I capitalize amortization table, the present value doesn't equal the sum of PV or the XNPV

How is it that when I capitalize an amortization table, the present value doesn't equal the sum of PV or the XNPV formula of all the future payments? If I capitalize the future payments with the same ...
1
vote
1answer
2k views

How to calculate EMI for Quarterly, Half yearly and Annual payments and generate amortization schedule?

I am a software engineer by profession. I am a newbie to finance. I am trying to create a loan amortization schedule. I have the formula for EMI= P*(r*(1+r)^n)/((1+r)^n)-1. How to apply it for ...
1
vote
1answer
57 views

How to calculate interest on Monthly Effective loans where duration greater than compounding

I have an amortization software and trying to manually calculate the interest accrued it calculated. The Key values are: Compounding: Monthly Nominal Annual Rate: 10% Day Count: 365 Principal: 500,...
1
vote
1answer
81 views

Calculating Amortization Payment Amount when first payment is early

How can I determine a fixed payment amount for a loan that has an early first payment? Example: Loan Amount: $100 Interest: 10% Loan Date: January 1st, 2018 First Payment Date: January 15th, ...
1
vote
1answer
1k views

Calculating the PV and the Remaining Payments for Loans with Steps

I thought I was able to figure this out, but unfortunately my numbers did not work. If someone would please help with this scenario, then that would be greatly appreciated. Say I'm taking out a $110,...
1
vote
1answer
237 views

Calculating payoff date and monthly payment for a school loan?

How can I verify the minimum monthly payment number and how it breaks down into principal vs. interest if all I know is the current balance and interest rate? How can I determine the payoff date of ...
1
vote
1answer
45 views

Remaining Balance Formula for Actual/360 and Actual/Actual Accrual Methods

Is there a concise formula for calculating the remaining balance of a loan with actual/360 and actual/actual accruals? I know for 30/360 amortizations, the remaining balance is just the FV of the ...
1
vote
1answer
53 views

Formula for time taken to pay off loan with annual interest and monthly repayments

I am trying to find how to work out the period of time it will take to pay off a loan. There are plenty of online calculators out there but I cannot find the formula they use. I want to recreate the ...