An interactive mortgage calculation using Excel. The inputs are: the value of the property, current interest rate (enter as decimal), the number of years the mortgage lasts (years) and the period (12 monthly payments in the year). The output is the monthly payment of the mortgage (PMT in red = monthly payment of the mortgage).
Proof of the mortgage formula is also included.
Note: this exercise has motivational value that each student may consider themselves as mortgage consultants.
Students may be asked to investigate by how much the monthly payment of the mortgage change when the interest rate becomes 15% instead of say 3% or 1.6% etc. (historically this has once happened during Mrs Thacher Premiership ) and the likely consequence of it - perhaps re-possession.
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£5.00