Interest only payment
 

I have a spreadsheet that takes everyones current mortgage amounts and
calculates their new payments at my "advertised" rate. What I'd like to do
is find a formula to determine how to figure an interest only payment based
off of the standard =pmt(rate,nper,pv) formula. Assuming that the loan will
be interest only for the first 5 years of the loan.
Thanks for any advice!

I dont know the specifics of what you'd like to offer but...You can use
simple interest (original(or current) amount *interest rate/12) for the
interest payment for the first 5 years, and the PMT formula for the payment
amounts after 5 years.

EX:

300,000 mortgage
360 months
6%

=300k*.06/12 = $1,500(initial pmt of interest only for first 60 months)
then for remaining 300 months payment amount...
=PMT(0.06/12,300,300k) = $1,932.90

this assumes total payoff in 360 months.

There is no need to use the payment formula for the first 5 years as you
only need the interest due.



hth,
Dave

"origin8r" wrote:

I have a spreadsheet that takes everyones current mortgage amounts and
calculates their new payments at my "advertised" rate. What I'd like to do
is find a formula to determine how to figure an interest only payment based
off of the standard =pmt(rate,nper,pv) formula. Assuming that the loan will
be interest only for the first 5 years of the loan.
Thanks for any advice!

That did it...exactly what I was looking for!! Thanks so much!

"Dave Breitenbach" wrote:

I dont know the specifics of what you'd like to offer but...You can use
simple interest (original(or current) amount *interest rate/12) for the
interest payment for the first 5 years, and the PMT formula for the payment
amounts after 5 years.

EX:

300,000 mortgage
360 months
6%

=300k*.06/12 = $1,500(initial pmt of interest only for first 60 months)
then for remaining 300 months payment amount...
=PMT(0.06/12,300,300k) = $1,932.90

this assumes total payoff in 360 months.

There is no need to use the payment formula for the first 5 years as you
only need the interest due.



hth,
Dave

"origin8r" wrote:

I have a spreadsheet that takes everyones current mortgage amounts and
calculates their new payments at my "advertised" rate. What I'd like to do
is find a formula to determine how to figure an interest only payment based
off of the standard =pmt(rate,nper,pv) formula. Assuming that the loan will
be interest only for the first 5 years of the loan.
Thanks for any advice!

... how to figure an interest only payment based
off of the standard =pmt(rate,nper,pv) formula.

Hi. In the Pmt formula, as the time period tends towards infinity, the
basic monthly payment tends to only interest. Therefore, if you use a time
period of say 10000 months, the payment formula will return the interest
payment.

=PMT(6%/12,10000,300000)

Returns: $1,500

The $1,500 interest only calculation may also be calculated by finding the
interest portion of the "first" payment.

=IPMT(6%/12,1,360,300000)

returns: $1,500

HTH :)

--
Dana DeLouis
Win XP & Office 2003


"origin8r" wrote in message
...
That did it...exactly what I was looking for!! Thanks so much!

"Dave Breitenbach" wrote:

I dont know the specifics of what you'd like to offer but...You can use
simple interest (original(or current) amount *interest rate/12) for the
interest payment for the first 5 years, and the PMT formula for the
payment
amounts after 5 years.

EX:

300,000 mortgage
360 months
6%

=300k*.06/12 = $1,500(initial pmt of interest only for first 60 months)
then for remaining 300 months payment amount...
=PMT(0.06/12,300,300k) = $1,932.90

this assumes total payoff in 360 months.

There is no need to use the payment formula for the first 5 years as you
only need the interest due.



hth,
Dave

"origin8r" wrote:

I have a spreadsheet that takes everyones current mortgage amounts and
calculates their new payments at my "advertised" rate. What I'd like
to do
is find a formula to determine how to figure an interest only payment
based
off of the standard =pmt(rate,nper,pv) formula. Assuming that the loan
will
be interest only for the first 5 years of the loan.
Thanks for any advice!