September 14th, 2008

A Canadian Mortgage Schedule Calculator

September 13th, 1997, Last updated 14 September 2008 If this doesn't work for you, drop me a line to: Interest and describe what went wrong.

Mortgage Details

Sometimes the calculations appear in a table behind this page!

The default values should give a monthly payment of $129.72. Using Excel PMT function the USA payment is $132.13

Sometimes the calculations take a while.

Comments

Interest Act. That Act provides that if a mortgage is made payable by blended payments of principal and interest then the mortgage must contain a "statement showing the amount of principal money and the rate of interest chargeable thereon, calculated yearly or half-yearly, not in advance." Few people know what that means. Most of us think that mortgage interest of 12% each year is the same as one per-cent (1%) each month. That is OK in the USA! But not in Canada, pity! For interest calculated half-yearly it actually means 0.97587942% each month. For interest calculated yearly it means 0.94887929% each month. Although the difference seems small, if you are a bank with many mortgages the small differences mean a lot of money!

Before computers, BC, mortgage lenders used monthly interest rates calculated by using logarithms and printed in books. In the absence of computers, powers and roots are easily handled by adding and subtracting logarithms, that was the method used to make the Interest Tables for the books.

Now some Mortgage lenders use daily interest calculations, and with equal monthly payments, the payments may be more or less than required because the payment required varies with the number of days between payments. So what you pay may or may not be adequate to keep on the old type of schedule. Using a spreadsheet makes more sense to keep track of your mortgage calculations, if interest is charged daily. That way you can enter what a Mortgage lender does, in fact, charge each month, what the lender should have charged, and what you paid.

This program produces mortgage repayments for a Canadian mortgage using half-yearly interest:

A Canadian Mortgage Payment Calculator

A Canadian Mortgage Schedule Calculator

Mortgage Details

Sometimes the calculations appear in a table behind this page!

Comments

Let me know

PLACES TO GO