loan calculator

IO loans are easy.

Amount times rate divided by 100.

So $200 000 times 6.85% divided by 100 = $13 700.

Divide this by 52 to get a weekly payment.

by 12 for a monthly payment.

Cheers,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

In case anyone is interested, below is the formula P&I loans use. It is called a Simple Interest Amortized Loan Formula:

PV * ( 1 + i )^N = PMT * [ ( 1 + i )^N – 1 ] / i

where

PMT = the payment per period

i = interest rate in percent per period (remember to divide annual interest rates by 12 to get the interest rate per month, which is the standard period.

PV = loan / mortgage amount (PV stands for present value, as in initial loan value)

N = number of periods (usually is number of months of the loan times years i.e. 25 yrs * 12 = 300.)

^ = means the following symbol is an exponent. i.e 2^3 = 8 2 is the base, 3 is the exponent.

most basic calculators can handle this if you are comfortable plugging in exponents.

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The left side of the formula is derived from a Compound Interest Future Value formula. If you take PV away from FV, you get an idea of how much interest you pay over the life of a loan.

FV = PV * ( 1 + i )^N

where

PV = present value
FV = future value (maturity value)
i = interest rate in percent per period
N = number of periods

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The right side of the formula is an Annuity Formula

FV = PMT * [ ( ( 1 + i )^N – 1 ) / i ]

FV = future value (maturity value)
PMT = payment per period
i = interest rate in percent per period
N = number of periods

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