In: Finance
You take out a 15-year $335,000 mortgage loan with a rate of 6% and annual payments. In 6 years you decide to pay off the mortgage. What is the principal balance on the loan after 6 years?
Mortgage loan =$335,000
Rate of interest=6%p.a.
Repayment=annually
Annual repayment =Loan Amount/PVAF (@6%,15yrs)
=$335,000/9.7122
=$34,492.70
Mortgage Repayment Schedule upto 6yrs
Amount in $
No.of Instalment | Payment Date at end of | Opening Balance | Scheduled Payment | Principal | Interest | Closing Balance |
A | B | C | D | E=D-F | F=C*6% | G=C-E |
1 | Year 1 | 335,000 | 34,492.70 | 14,392.7 | 20,100 | 320,607.30 |
2 | Year2 | 320,607.30 | 34,492.70 | 15,256.26 | 19,236.44 | 305,351.04 |
3 | Year 3 |
305,351.04 |
34,492.70 | 16,171.64 | 18,321.06 |
289,179.40 |
4 | year 4 | 289,179.40 | 34,492.70 | 17,141.94 | 17,350.76 | 272,037.46 |
5 | Year 5 | 272,037.46 | 34,492.70 | 18,170.45 | 16,322.25 | 253,867.01 |
6 | year 6 | 253,867.01 | 34,492.70 | 19,260.68 | 15,232.02 | 234,606.33 |
Principal balance of loan at the end of 6th year after repayment of 6th annual instalment will be $234,606.33
So, to pay off mortgage at end of 6th year we will be required to pay $234,606.33 as principal amount and premature interest if any