Use the PMT Function to Calculate Mortgage Payments and Cost of Financing
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- čas přidán 6. 09. 2024
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The PMT function in Excel can be be used to determine the monthly payment for any fixed-rate loan. By providing information like mortgage (home loan) amount, number of years, and rate, we can calculate the precise monthly mortgage payment. Then, we can determine the cost of financing and perform what-if analysis to see the impact of 15-year mortgages vs 30-year.
This helped a ton thank you. No other website was showing me what to do to correctly and you got straight to the point!
Thank you for sharing. I really like how you explained the steps. I'm looking to buy a house so will use this method.
Excellent presentation. Thank you for helping us!
How would the pmt formula change if interest is compounded quarterly?
Cost of finance should be E8-E4 right? Instead of E8-E2
No, e8-e2. You want to determine the extra cost paid above and beyond the price of the house. If you pay 100% of the house in cash you don’t need a loan so the cost of finance is zero.
Thanks for watching.
@@SixMinutesSmarter I want to know how much extra I payed for the loan alone I guess.
I've got a video at czcams.com/video/ukYE8GL-4e4/video.html that will hopefully shed a little more light on the matter. Total interest is a really big part of the extra cost because of loan. Additionally, there are generally some fees at signing that could also be considered costs.