I'm new to this site (first post) and I haven't done high school or university maths for 20 years, so what I am attempting is beyond me.
I have the following formula for a home loan:
A = [P(1 + R/f)(Yf)R/f]/[1 + R/f)(Yf) - 1] where (Yf) should be super-scripted, ie "to the power of".
A = periodical repayments
P = initial loan amount (principal)
R = interest rate per annum
f = frequency of repayments per annum (i.e. monthly = 12 etc)
Y = term of loan in years
My data is as follows:
Fortnightly repayments = $1145.44 (a little more than I need to.)
Current loan amount = $308,000
Interest rate = 8.0%
Repayment frequency = fortnightly (26 times p.a.)
28 years remaining on a 30 year loan
What I want to know is, on a standard home loan, how do I calculate the following:
1. If I pay a one-off amount into the mortgage on top of my regular repayments, how much does this reduce the term Y by (assuming interest rates do not change)?
2. How much interest do I save over the term of the loan by doing this (assuming interest rates do not change)?
3. How do I calculate the reduction on the term of my loan by paying small extra amounts? That is, as interest rates fall I continue to pay the same amount as I did at the peak of the interest rate cycle
4. How do I calculate the interest I save by paying the extra small amounts?
I'm guessing the above formula is inadequate for what I need, and that I need an amortization table in an Excel spreadsheet so that I can plug the numbers in. I'd also like to graph the data in Excel to get a visual indication of the effects of what I propose.