{"id":3256,"date":"2016-10-27T12:00:55","date_gmt":"2016-10-27T12:00:55","guid":{"rendered":"http:\/\/margill.com\/en\/?p=3256"},"modified":"2025-10-10T10:57:47","modified_gmt":"2025-10-10T14:57:47","slug":"mortgages","status":"publish","type":"post","link":"https:\/\/margill.com\/en\/mortgages\/","title":{"rendered":"Mortgages"},"content":{"rendered":"<h3>See also:<\/h3>\n<ul>\n<li><a href=\"https:\/\/margill.com\/markets\/real-estate-en.htm\">Real-estate<\/a><\/li>\n<li><a href=\"https:\/\/margill.com\/markets\/finance-en.htm\">Finance<\/a> (Banking, Lending, Leasing)<\/li>\n<li><a href=\"\/en\/loans\/\">Loans<\/a><\/li>\n<li><a href=\"\/en\/investments\/\">Investments<\/a><\/li>\n<\/ul>\n<p class=\"texteFushia\" align=\"left\">The dollar ($) has been used in these examples, but any other currency (\u20ac, \u00a3, F, \u00a5, R, DA, Rs&#8230; etc.) may be used.<\/p>\n<p class=\"texteFushia\" align=\"left\"><span class=\"texteNoir\">Most of the calculations below may use Fixed (unique interest rates) or Variable rates.<\/span><\/p>\n<hr \/>\n<h3>Real-life examples:<\/h3>\n<p align=\"left\"><a href=\"#1\">Regular mortgage<\/a><\/p>\n<ul>\n<li>USA, Europe, Australia&#8230;<\/li>\n<li>Canada<\/li>\n<\/ul>\n<p align=\"left\"><a href=\"#2\">Irregular mortgage with lump sum payments<\/a><\/p>\n<p align=\"left\"><a href=\"#3\">Mortgage using variable interest rates<\/a><\/p>\n<p align=\"left\"><a href=\"#3-1\">Adjustable rate mortgage (ARM) with <b>payments adjusted<\/b> according to the interest rates in force<\/a><\/p>\n<p align=\"left\"><a href=\"#4-1\">Mortgage that includes unknown future interest rates with payments adjusted as these rates become known<\/a> (Loan example)<\/p>\n<p align=\"left\"><a href=\"#4\">Reverse mortgage<\/a><\/p>\n<p><a name=\"1\"><\/a><\/p>\n<hr \/>\n<h2><span class=\"texteOrange\"><span style=\"font-size: small;\"><b>Regular mortgage<\/b><\/span><\/span><br \/>\n<span style=\"font-size: small;\"><b>USA, Europe, Australia&#8230;<\/b><\/span><br \/>\n<b><span style=\"font-size: small;\">Input screen:<\/span><\/b><\/h2>\n<div align=\"center\"><img decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage1.gif\" alt=\"\" \/><\/div>\n<ul>\n<li>Reimbursement frequencies can differ : ex. twice monthly, biweekly, weekly, every x days etc.<\/li>\n<\/ul>\n<h3><b><span style=\"font-size: small;\">Results screen:<\/span><\/b><\/h3>\n<p align=\"center\"><img decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage1a.gif\" alt=\"\" \/><\/p>\n<ul>\n<li>Lump sums may be added at any time.<span style=\"font-size: small;\"><b><br \/>\n<\/b><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: small;\"><b>Canada<br \/>\n<\/b><\/span><b><span class=\"texteNoir\"><br \/>\n<\/span><\/b><span class=\"texteNoir\">For Canadian mortgages, the compounding period is semiannual. <\/span><b><\/b><\/p>\n<div align=\"center\"><b><span style=\"font-size: small;\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage1b.gif\" alt=\"\" width=\"277\" height=\"38\" border=\"1\" \/><\/span><\/b><\/div>\n<p><b><span style=\"font-size: small;\"><br \/>\n<\/span><\/b><span style=\"font-size: small;\"><a name=\"2\"><\/a><br \/>\n<\/span><\/p>\n<hr \/>\n<h2><span style=\"font-size: small;\"><span class=\"texteOrange\"><span style=\"font-size: small;\"><b>Irregular mortgage with lump sum payments<\/b><\/span><\/span><\/span><\/h2>\n<p>The data entry screen is as shown above. The changes are made in the Results screen (payment schedule), which can be totally customized. See below.<\/p>\n<ul>\n<li>The borrower wishes to pay $5000 on the first of January of every year. In order to achieve this, change all those payments at once by selecting those specific payment lines (&#8220;Ctrl&#8221; key and mouse) then with the right mouse clic, change the payments.<span style=\"font-size: small;\"><br \/>\n<\/span><\/li>\n<\/ul>\n<div align=\"center\">\n<p><span style=\"font-size: small;\"><img decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage2a.gif\" alt=\"\" border=\"1\" \/><\/span><\/p>\n<p><a name=\"3\"><\/a><\/p>\n<\/div>\n<hr \/>\n<h2><span class=\"texteOrange\"><b><span style=\"font-size: small;\">Mortgage using variable interes<\/span><\/b><\/span><span class=\"texteOrange\"><b><span style=\"font-size: small;\">t rates<\/span><\/b><\/span><\/h2>\n<p><span class=\"texteNoir\">Margill includes many variable interest rate tables. You can also create your own in a snap.<\/span><\/p>\n<p><span class=\"texteNoir\">You can also specify that x% is to be added (or subtracted) from the published rates.<\/span><\/p>\n<h3><b><span style=\"font-size: small;\">Input screen :<\/span><\/b><\/h3>\n<div align=\"center\"><img decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage3.gif\" alt=\"\" \/><\/div>\n<p><b><span style=\"font-size: small;\">Results screen:<\/span><\/b><\/p>\n<div align=\"center\">\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage3a.gif\" alt=\"\" width=\"565\" height=\"424\" \/><\/p>\n<div align=\"left\"><a name=\"3-1\"><\/a><\/div>\n<hr \/>\n<h2><span class=\"texteOrange\"><b><span style=\"font-size: small;\">Adjustable rate mortgage (ARM) with payments adjusted according to the interest rates in force<\/span><\/b><\/span><\/h2>\n<p align=\"left\">A future (predicted) variable interest rate table is created.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage3-1.gif\" alt=\"\" width=\"250\" height=\"362\" \/><\/p>\n<p align=\"left\">This table is then used for the calculation. In this example the applicable rates are the rates above plus 0.75%.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage3-1a.gif\" alt=\"\" width=\"565\" height=\"363\" \/><\/p>\n<p align=\"left\">The payments are then automatically adjusted according to the rates. The payments will vary to first cover (refund) interest and the balance of the payment to refund the principal.<\/p>\n<p align=\"left\">See the &#8220;Payment&#8221; column below from the Results screen.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage3-1b.gif\" alt=\"\" width=\"535\" height=\"356\" border=\"1\" \/><\/p>\n<div align=\"left\"><a name=\"4\"><\/a><\/div>\n<hr \/>\n<h2 class=\"texteOrange\" align=\"left\"><b><span style=\"font-size: small;\">Reverse mortgage<\/span><\/b><\/h2>\n<p align=\"left\">Reverse mortgages have a different purpose than normal forward mortgages do. With a reverse mortgage, you are taking the equity out in cash. So with a reverse mortgage your debt increases and your home equity decreases.<\/p>\n<p align=\"left\">Let&#8217;s do an example:<\/p>\n<p align=\"left\">The Jones&#8217; home equity is about $350,000 and now being at retirement age, they wish to &#8220;live a little&#8221; without selling their home. They wish to receive $75 000 up front and then $2500 in regular payments for 60 months. The interest rate for the loan is 9.5% annually.<\/p>\n<p align=\"left\">In &#8220;Fixed Rate Calculations&#8221; use &#8220;Recurring Payments (Amortization)&#8221;. The initial principal is $75,000 since this is the upfront amount that was loaned to the Jones and the payment is <b>minus<\/b> $2500 since the Jones are not reimbursing their loan but receiving $2500 per month for 60 months.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage4.gif\" alt=\"\" width=\"565\" height=\"387\" \/><\/p>\n<p align=\"left\">After 60 months, the Jones would owe $310,485.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/mortgage4a.gif\" alt=\"\" width=\"565\" height=\"429\" \/><\/p>\n<p align=\"left\">You can then save the schedule and include any irregular incident : larger monthly cash loan (- amount), reimbursement (+ amount) at any time, etc.<\/p>\n<p align=\"left\">Total flexibility<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>See also: Real-estate Finance (Banking, Lending, Leasing) Loans Investments The dollar ($) has been used in these examples, but any other currency (\u20ac, \u00a3, F, \u00a5, R, DA, Rs&#8230; etc.) may be used. Most of the calculations below may use Fixed (unique interest rates) or Variable rates. Real-life examples: Regular mortgage USA, Europe, Australia&#8230; Canada [&hellip;]<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","footnotes":""},"categories":[193,408,404],"tags":[],"class_list":["post-3256","post","type-post","status-publish","format-standard","hentry","category-knowledge-base","category-margill-law-and-standard","category-margill-loan-manager"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\r\n<title>Margill | How to calculate Mortgages<\/title>\r\n<meta name=\"description\" content=\"Learn how to calculate mortgages within our interest calculation software.\" \/>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" 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