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installments will consist of relatively larger interest payments and relatively smaller principle amount payments. Near the end of the loan period, the installments will consist of relatively smaller interest payments and relatively larger principal amount paymens. If the interest rate is changed by the lender, the borrower will receive a new payemnt plan, wherein all installments will still be the same amount (however, a bit higher if the interest has increased, a bit lower if the interest has decreased). So; in an "annuitetslĂĄn", the installments are the same but the payable interest part and the payable principal part vary throughout the loan. The interest rate itself is still floating, unless the parties have entered into a fixed rate agreement.
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The other variant (still a floting rate loan) is a "serielĂĄn" (linear loan), where the principal amount payable is the same throughout the loan period. This means that the installments will vary, because the borrower will pay more interest in the beginning of the loan period, because payable interest
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In the
Pricing section, the last paragraph, three key components of fixed-rate loans are listed. I suggest changing item 2 to be more precise and less ambiguous as follows. The ambiguity I'm seeing is that the "amount owed" for any given month could be misconstrued as the amount of the fixed monthly
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A Norwegian "annuitetslĂĄn" most often will have a floating interest rate. However, as long as the interest actually rate remains the same (until the bank changes the interest rate) all installments payable are of an equal amount. Meaning that in the beginning of the total loan period, the
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I do not have any input as to chages in this article, but the languages link/redirect click should be removed for the
Norwegian page (as well as the Swedish and Danish at least - I do not speak any of the other languages and cannot say whether it also applies to those)
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i understand you use official definition and calculations. the problem is fixed rate is not really fixed as we know, in reality it variable rate with starting rate of 90%. this fact never mentioned and 90% interest create unequal positions.
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This page refers to US style fixed rate mortgages only. Fixed rate loans in UK and Europe work differently. For example in the UK fixed rates typically only apply for 2,3,or 5 years of the mortgage before reverting to a tracker or
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The
Norwegian article (as well as several of the other languages) does not describe a fixed rate mortgage (NO:fastrentelĂĄn), but one of two ways of stcructuring instalments vs. interest rates on a floating rate loan.
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This page has a better (I think more accurate too) calculation for fixed rate mortgages with a correctly calculated monthly compound interest rate:
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under terminology we have: "The price of the FRM as calculated by adding Index + Margin = Fully
Indexed Rate." but "margin" is never defined.
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The
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is not true. If i have 12% annual rate it is not the same as 1% per month. It would lead to (1.01)^12 = 1,126825 =: -->
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is calculated on the remaining outstanding principle amount (which will be larger at first and decrease with time).
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12,68% annual rate. Correct calculation is (1+r)^(1/12)-1 so unless you cite any resources there is a mistake.
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All other types of mortgage have their own page. Fixed Rate
Mortgage should have it's own page as well. IMO...
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An additional agreement re. fixed rates may be entered into w/regards to both loan types (annuitet / linear).
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articles on
Knowledge. If you would like to participate, please visit the project page, where you can join
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divide the quoted yearly nominal percentage rate by 100 and by 12 to obtain the monthly interest rate
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on
Knowledge. If you would like to participate, please visit the project page, where you can join
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494:"cyclotomic polynomial", "geometric progression" to derive this, perhaps a link for math wanks.
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Fixed rate mortgages don't have an index or margin -- that's why they're fixed.
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393:, such as in Canada, where it is compounded every 6 months." I guess its USA?
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465:. The differences are significant. I propose either renaming this page
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I suggest redirecting or at least making the differences clear.
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or rewriting the page to incorporate non-US information.
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and create the page myself. Rip it apart as needed...
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The
English article discribes a fixed rate mortgage.
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479:Agree - be bold, simonthebold.--
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121:Knowledge:WikiProject Business
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720:WikiProject Business articles
228:and see a list of open tasks.
163:This article is supported by
127:WikiProject Business articles
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377:no vfd for ARM? --
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36:scale.
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