BANKERSFIRST CHOICEB1C FINANCIAL TOOLS / 01
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THE LONG VIEW
Total outlay includes down payment, closing costs and scheduled housing costs until payoff. It excludes maintenance, utilities and sale costs.
BOTH LOANS FULLY REPAID / MONTHLY PAYMENTS
One amortizing mortgage versus one flat simple-interest loan. Both use the same loan amount, annual rate and term, and both finish at $0. The flat-interest calculation is original loan × annual rate × years.
Left: monthly amortization using the annual rate ÷ 12 on the declining balance and the standard compound-rate annuity formula. Right: flat simple interest on the original principal for the full term, divided into monthly installments. A flat rate and an amortizing nominal rate are not equivalent APRs. This comparison excludes taxes, insurance, fees and extra payments. Final payments adjust for cent rounding; both ending balances are zero.
EVERY PAYMENT, EXPLAINED
| Period | Regular P&I | Extra | Principal paid | Interest | Housing costs | Total paid | Balance |
|---|
CSV includes every payment. Printing includes the schedule rows currently displayed.
HOW TO READ YOUR RESULTS
The nominal annual rate is converted to an equivalent payment-period rate: (1 + annual rate ÷ compounds per year) raised to (compounds per year ÷ payments per year), minus 1. The loan is amortized at that rate. This is a rate-quotation convention; unpaid interest is not capitalized in this on-time-payment model.
Per-period simple interest uses annual rate ÷ payments per year on the remaining balance. Daily simple interest uses actual elapsed days ÷ 365. Unpaid interest is never added to principal here; every modeled payment covers its accrued interest.
Payments occur after each period. Monthly dates are anchored to the original day and clipped to month-end. Every-two-week payments are 14 days apart; weekly payments are 7 days apart, with 26 or 52 payments per modeled year. No accelerated half-monthly-payment strategy is assumed.
Fixed rates, on-time payments and cent-rounded interest. The last payment adjusts to clear the balance. Closing costs are paid upfront. Tax and insurance are allocated estimates; escrow rules and APR calculations are not modeled.
Read more: CFPB on mortgage amortization ↗ · CFPB on simple interest ↗ · FCAC mortgage guide ↗
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