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TStoneMBD
03-20-2005, 10:34 AM
say that i have a 100,000 mortgage at 6% interest, and am paying \$500 a month to pay it off, how do i caculate the equity buildup from each months mortgage payment?

from my understanding, the number is usually around half the payment, if the loan is for 30 years. is there a simple mathematical equation to solve this, or an online java applet that you can enter these numbers into?

GeorgeF
03-20-2005, 11:14 AM
Depending on your mortgage contract each mortgage payment reduces the principle you owe the bank. Your mortgage broker should tell you what you owe. If you are good with spreedsheets you could fire up MS Exel and do it your self.

Equity = Sale price - mortgage principle.

Determining the sale price is impossible with out selling it, althought learned people will tell you that it can be estimated.

DesertCat
03-20-2005, 12:50 PM
[ QUOTE ]
say that i have a 100,000 mortgage at 6% interest, and am paying \$500 a month to pay it off, how do i caculate the equity buildup from each months mortgage payment?

from my understanding, the number is usually around half the payment, if the loan is for 30 years. is there a simple mathematical equation to solve this, or an online java applet that you can enter these numbers into?

[/ QUOTE ]

You are paying \$6,000 per year in interest, or \$500 a month. If your payment is the same as your interest costs, you are building zero equity, you have an interest only loan.

So to calculate, get a recent balance, multiply by interest rate, divide by twelve. The amount your payment exceeds your interest obligation is the equity you are paying off that month. It will obviously increase (slightly) from month to month.

Ray Zee
03-20-2005, 10:36 PM
look up any mortgage loan calculator and that will have it for any particular month. but in general for 30 years the early years you pay off little principle.

for your example you are paying off no principle as your payment equals interest.

Dan Mezick
03-21-2005, 05:54 AM
This link will do what you want, choose the [Amortization Schedule] button to see the principal in each payment.

http://mortgages.interest.com/content/calculators/monthly-payment.asp