Error in interest amount?

[tom17]

Hi,

I have an existing mortgage and something has been bugging me for the longest time. I have a spreadsheet I created so that I can track various parts of my amortization. I am sure the formulas are correct, as if I plug the same numbers into any online calculator, the values match perfectly.

However, the interest payment I am seeing on my actual mortgage is a little lower than my, or any online calculators, suggest it should be.

It is a variable rate (currently 2.35%) Canadian mortgage with accelerated bi-weekly payments. We have fixed our payments to a value substantially higher than the minimum needed.

Can any mortgage bean-counter tell me why these values may differ? I can pm the values to anyone willing to plug the numbers for me.

Thanks,

Tom...

[chuppe]

Are you sure you used a canadian mortgage calculator?

Last time I compared my mortgage with an online calculator, it was a US mortgage calculator and it didn't match. In the US, the interest is normally compounded monthly, but in Canada, most mortgages are compounded semi-annualy. This might be the source of your difference...

Must be the same thing with your spreadsheet.

[Wonderdollar]

Hi,

I have an existing mortgage and something has been bugging me for the longest time. I have a spreadsheet I created so that I can track various parts of my amortization. I am sure the formulas are correct, as if I plug the same numbers into any online calculator, the values match perfectly.

However, the interest payment I am seeing on my actual mortgage is a little lower than my, or any online calculators, suggest it should be.

It is a variable rate (currently 2.35%) Canadian mortgage with accelerated bi-weekly payments. We have fixed our payments to a value substantially higher than the minimum needed.

Can any mortgage bean-counter tell me why these values may differ? I can pm the values to anyone willing to plug the numbers for me.

Thanks,

Tom...

Your interest rate seems to be very low, with a discount of 1.65% from Prime. Are you sure that it is your regular rate and not a 'teaser rate' and the compounding done by the bank is the same used by you in your calculator?

However, if you PM me the name of the bank your mortgage is with, how the compounding is done by the bank, whether the rate is a teaser rate or a regular rate, the original amount of mortgage, the date the mortgage started and the payments you are making along with any changes in the rates and your payments over time, I would try to put in the numbers and let you know if the bank is charging interest correctly or not. Also please send the amortization schedule you received from the bank.

[dash riprock]

Hi,

I have an existing mortgage and something has been bugging me for the longest time. I have a spreadsheet I created so that I can track various parts of my amortization. I am sure the formulas are correct, as if I plug the same numbers into any online calculator, the values match perfectly.

However, the interest payment I am seeing on my actual mortgage is a little lower than my, or any online calculators, suggest it should be.

It is a variable rate (currently 2.35%) Canadian mortgage with accelerated bi-weekly payments. We have fixed our payments to a value substantially higher than the minimum needed.

Can any mortgage bean-counter tell me why these values may differ? I can pm the values to anyone willing to plug the numbers for me.

Thanks,

Tom...



are you sure of the 2.35%? That is prime minus 1.65%. PM me and I'll work the numbers for you

[gman]

Hi,

I have an existing mortgage and something has been bugging me for the longest time. I have a spreadsheet I created so that I can track various parts of my amortization. I am sure the formulas are correct, as if I plug the same numbers into any online calculator, the values match perfectly.

However, the interest payment I am seeing on my actual mortgage is a little lower than my, or any online calculators, suggest it should be.

It is a variable rate (currently 2.35%) Canadian mortgage with accelerated bi-weekly payments. We have fixed our payments to a value substantially higher than the minimum needed.

Can any mortgage bean-counter tell me why these values may differ? I can pm the values to anyone willing to plug the numbers for me.

Thanks,

Tom...

I find it hard to calculate variable rate myself because it is hard to keep track when they change the interest rate. Have you really keep track of every exact day they change the interest rate?

Of course, in addition, 2.35% is really really low as a variable rate. I don't recall when anyone gave out prime - 1.65% in the past 10 years.

BTW, if they charge your interest portion lower than 'it should be', would that be a very good thing anyway?

[chris103610]

BTW, if they charge your interest portion lower than 'it should be', wouldn't that be a good thing anyway?

exactly what i was thinking...

[Thalo]

Interest rate is probably 3.25% (P-.75%). More realistic.

[jacksorbetta]

The interest rate on my mortgage is currently 1.375%. Yep, that's right, 1.375. I got in the last 2 wks when the 6 year flex was offered (prime - 2.25-.375 employee discount). It is due to reset Jan 1/09 to Prime -.675. Even then, it's a fab rate. Fortuitous timing I'd say that I found my house to buy in August before the poop hit the fan.

[Rishi]

The interest rate on my mortgage is currently 1.375%. Yep, that's right, 1.375. I got in the last 2 wks when the 6 year flex was offered (prime - 2.25-.375 employee discount). It is due to reset Jan 1/09 to Prime -.675. Even then, it's a fab rate. Fortuitous timing I'd say that I found my house to buy in August before the poop hit the fan.
Now that is what I call a hot deal!

[Thalo]

The interest rate on my mortgage is currently 1.375%. Yep, that's right, 1.375. I got in the last 2 wks when the 6 year flex was offered (prime - 2.25-.375 employee discount). It is due to reset Jan 1/09 to Prime -.675. Even then, it's a fab rate. Fortuitous timing I'd say that I found my house to buy in August before the poop hit the fan.

Damn... puts my 3.5% HELOC (P-.5%, permanent, staff discount) to shame. :razz:

[tom17]

Thanks for all the replies.

Yep, it is a teaser rate, currently prime -1.65. It will go up to prime -.25 (I think) after the first 9 months of the mortgage.

I am definitely using Canadian calculators/formulas (Compounded twice annually rather than monthly).

I realize that given any period where there has been a rate change, I would have to account for the number of days in that period for both the before & after rate. However, the upcoming period is a simple one where the rate does not change for its duration.

I would be curious to know how future/past rates would affect the interest paid in a 2 week period where there is no rate change. Surely the interest for any given period is based solely on the remaining principal during that period, and the (correctly compounded) current interest rate. The amortization schedule would be more affected by the amount of principal you pay on top of the interest. yes, I understand that the amount of interest in following periods would be affected by the amount of principal you pay down on previous periods.

I also realise that it's a "Good Thing" that it is lower than it *should* be. However if there is an error, I do not want it to come back later and bite me in the ar*e when they want their money back :)

I cannot get an amortization schedule from the company as it is variable rate.

I'll PM the details of this month to those of you that offered to help.

Thanks!

Tom...