I know that, in the early years of a mortgage, most of the monthly repayment amount services the interest rather than paying down the capital. I'm trying to cost that out more quantitatively for a given mortgage amount and monthly repayment.
So, say, it's a £200k, 25yr mortgage, simple capital and interest at 3%, monthly repayments of about £1000. How can I work out (or more helpfully, is there anywhere on the web that will do it for me) how much of the £1000 is servicing the interest and how much repaying the capital in year one, year two year three etc etc.
There are millions of mortgage calculators about, but none that will do this it seems 🙁
FWIW, I'm trying to compare the cost of renting vs. the cost of buying over the short term.
http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator
Pop it in that, the output shows a graph of capital repayment rate.
Use the compound interest formula from this page: http://en.wikipedia.org/w/index.php?title=Compound_interest
Then just subtract the total loan divided by n payments.....
Just use Excel. It's got all the calculations you need, although they are admittedly quite tricky to find since Excel isn't available in English yet.
I was doing this a short while ago, I'll ping you something over.
Edit: will have to be later this evening though, don't have a copy at work.
An amortisation calculator is what you need
=IPMT(0.0025,1,300,-200000,0)
= £500
1 £6,000.00
2 £5,835.43
3 £5,665.93
4 £5,491.34
5 £5,311.51
6 £5,126.29
7 £4,935.51
8 £4,739.01
9 £4,536.61
10 £4,328.14
11 £4,113.42
12 £3,892.26
13 £3,664.46
14 £3,429.82
15 £3,188.15
16 £2,939.23
17 £2,682.84
18 £2,418.76
19 £2,146.75
20 £1,866.59
21 £1,578.02
22 £1,280.79
23 £974.65
24 £659.32
25 £334.53
The formula I showed above assumes an annual interest rate of 3%, which equates to 0.0025 per month.
The seocnd parameter is the period you are interested in - 1 in this case.
The 300 is the number of payment periods - 300 months.
-200000 is how much you owe.
0 is the amount you want to owe at the end.
I couldn't be bothered showing all the months, but then reread your post and did the years for you.
Cheers all