/biz/ - Business & Finance

>>52299437
>I thought the interest would have been 3.42% of $204,000 (which is $6976)?
oh my sweet summer child
see, thats how it would work if white people were in charge

>>52299437
the rate is applied yearly, not once. assuming you’re doing a 30 year fixed in your calculation, you apply that rate 30 times (minus your yearly payoff). They Jew you though by applying your mortgage to the interest first and not the principal.

>>52299437
annual anon
annually you pay that amount (around the amount of 3.42% on the remainder of your loans)
do it for 30 years

God damn it, you're not gonna like this kid, the percentage you're seeing is the yearly interest over the outstanding mortgage debt.
e.g. on month 1 you will owe

3.42 percent of $204,000 = $6976 / 12 = 581 dollars interest.

then of course you also want to pay off some principal, otherwise the mortgage never gets paid back!

the short version:

>of course goy!
>here's 300k to buy a house
>relax you can pay me back for 40 years

you only pay off a little of the loan each year right.
So the following year you are charged interest again. Majority of the repayments for the first several years is mostly paying interest. Its why by paying back more than minimum you can save a fortune in interest.

>>52299539
>do it for 30 years
So Im guessing the rates go up if I want to do it over 20 years? Otherwise it wouldnt make sense to just do it over a longer time?

>>52299586
>>52299649
>God damn it, you're not gonna like this kid
Jesus, thats an understatement, but thanks.

>then of course you also want to pay off some principal, otherwise the mortgage never gets paid back!
>Its why by paying back more than minimum you can save a fortune in interest.
So is it interest on the remaining amount?

>>52299727
>So is it interest on the remaining amount?
yes. every day they calculate how much you owe and charge interest on that number. So if you pay $650 off, the next day they will caluclate interest on $203,350. then at the end of the month they will charge you the interest of $549, so you really only paid off $101.
Then you make next payment of $650, and they charge you interest for that month, and this continues until the end.
If rates go up to 5% you'll pay back 400k

If you can pay an extra $100 per week, you will save $39,000 in interest (assuming rates stay the same)

You'll get even more mad when you learn jews print this money out of thin air that you pay back with interst, lol

>>52299906
>If rates go up to 5% you'll pay back 400k
>You'll get even more mad when you learn jews print this money out of thin air that you pay back with interst, lol
What the absolute fuck.

I thought 2.79% interest was over the 30 years of my mortgage and not the annual interest rate until I actually started paying my mortgage of 350k. welcome to the retard club.

>>52299906
>>52299931
That’s with variable rate though as shown in your picrel. Variable is generally a terrible idea

>>52300011
Well I guess now with massive inflation and the rates being pushed up.

>>52299906
So let say I start my mortgage off with a 5yr fixed rate over 33 years with a lower monthly repayment.

Mortgage amount: $205,800
Cost of Credit: $114,661.33
Total: $320,461

I pay off 50k in the first five years. I then want to renegotiate my term, lets say, down to 15 years. Is that 50k subtracted from the new cost of credit plus the mortgage amount (which is $245,200), so my new cost of credit goes down?

I appreciate this by the way, not trying to get you guys to be my personal accountants but this really confuses me. You fuckers are teaching me more in one night than weeks anywhere else.

As said above, the rate is based off the yearly balance. You also pay the interest off first and then the principal. This means that you're paying interest on the full balance for a long time. There's a reason this kind of kikery is banned in sand nigger countries. It's blatantly stealing

>>52300272
Its mindblowing. I was totally oblivious to this. This is usury on a scale I didnt think possible. /pol/ really was right.

>>52300216
You mean 50k repayments over 5 years?
You will have paid off only $22,438 principle, remaining loan will be $183,362.
Future interest inst applied.
So you could refinance the $183,362 and start a 15 year loan.

Or, if you bank allows additional repayments without penalty, then you can just keep the same loan and pay it off faster by paying extra each week/month (paying weekly also saves you interest).

>>52300461
>then you can just keep the same loan and pay it off faster by paying extra
So a longer term with overpayment is better? Is this because rates change with they charge you extra monthly if the term is shorter?

>>52299437
Please be bait holy shit

>>52300461
>oops thats a 30 year chart
so 33 years means you paid less.
$186,525 remaining (19,275 paid off)

>>52300600
it just gives you flexability.
If you broke one month, your payment will be lower.
If you can pay extra, do it.
You just got to make sure they stipulated no penalty for early repayments /extra repayments

>>52300611
I wish it were true anon. But not all of us can be endowed.

>>52300643
Thanks bro, this is solid advice.

>>52299906
So do they calculate the new cost each month or year after you make a payment?

>>52300652
some more advanced homeloan features you may be interested in are
>offset account. Any money you put in here lowers your interest like you paid it off the loan, but you can take it out any time
handy if you want to save for a second property. Say you save up $20k for the deposit on the second property, it lowers your interest the whole time it sits in the off set account. Then when you buy next property, your first loan payments go back to normal.

You can actually have your entire pay go into your offset account each week/month, then each day it lowers your interest each day, as you spend you pay it lowers, but you save interest long term.
even more advanced is you shop on your credit card for the whole month for normal gorocies fuel etc, then pay off card at the end of the month (before the interest free period ends). that means your entire monthly salary offsets the home loan interset up until you pay back the credit card. And because you pay back the credit card in full within the interst free period, you pay no interest on that. You also earn credit card loyalty points, frequent flyer points etc. You just DONT spend more than you earn on credit card.

>redraw facility. if you have paid extra into the home loan (say your ahead $2000 in payments) you can take it back out
i prefer offset, but this can work too.

>>52300779
they calculate the interest daily (and rub their hands vigorously while doing so)

3.24%/365days (0.0088% interest daily)

>>52300814
>>52300838
You two are based without peer. I wont let the Jews get away with this.

>>52299437
Table mortgage

>>52299437
APR isn't interest, as interest is factored into APR.