Mortgage Rate

J

JJA

I need to create a spreadsheet that will calculate what the actua
mortgage rate would be if a loan had no points.

Ex.
$600,000
20 years
5.625% with one point
one point on this ex = $6,000

what would the actual rate be without and points?

Any help is appreciated
 
J

jeff

HI,

Take a look at this site:

http://www.mortgages-loans-calculators.com/Calculator-
Mortgage-Points.asp

You could do the same thing by setting up amortizations
for both ways: with and without the points.

IE. rate is 5.625 with 1 point; ? rate without points
(remember, points added on to your mortgage (or paid
if you like) get you a lesser interest rate. You need
a little more info here.

jeff
 
D

Dave O

This is a three step process:
1. Calculate the payment with no points
2. Calculate the payment using the same interest rate and duration,
using the points figure as the principle
3. Calculate the APR using the RATE() function using the number of
months and the principal from step 1. For the payment amount, add the
results from step 1 and step 2. Since RATE() returns a monthly
interest rate, multiply this result by 12 for the Annual Percentage
Rate.

Comme ca:
1. =PMT(5.625%/12,20*12,600000) Result is -4169.80
2. =PMT(5.625%/12,20*12,6000) Result is -41.70
3. =RATE(20*12,-4169.8+-41.7,600000)*12 Result is 5.74708%

Remember to show enough decimal points in your answer! You may find
this site helpful:
http://partners.financenter.com/consumer/learn/guides/refinance/refishopping.fcs
 
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