Should lengthen the term of the mortgage?
The monthly fee you will pay, when it comes to amortize their mortgage loan, depends on three factors: the amount of the loan, the interest rate and the plazo.Por the scale of the operation, mortgage loans have a long-term , Which usually already exceeds twenty years and that in some recent deals, reaching 40 and even 50 years.
If you do not change interest rates, the longer the term of the loan the lower the fee and, in cases of mortgage loans for home purchase, these lower fees can be crucial to allow access to the building. However, when the deadlines are already very lengthy, the decline of contributions is much less noticeable, especially the higher the rate.
In the graph and table below, showing how varied the monthly fee for a loan of € 10,000 depending on the length of time (from 5 to 50 years) and for three fixed interest rates (3, 4 and 5%).
| Interest rates | Duration of the loan in years | |||||
|---|---|---|---|---|---|---|
| 10 | 20 | 30 | 35 | 40 | 50 | |
| 3% | 96.56 | 55.46 | 42.16 | 38.49 | 35.8 | 32.2 |
| 4% | 101.25 | 60.6 | 47.74 | 44.28 | 41.79 | 38.57 |
| 5% | 106.07 | 66 | 53.68 | 50.47 | 48.22 | 45.41 |
For example, extending the initial deadline by 33%, from 30 to 40 years, reflecting a reduction in the quota from 15 (if the interest is 3%) and 10% (5% interest). In that same case, the total interest that would pay to reach the maturity of the transaction would increase by 38.75% from 5177.60 to 7184 euros (if the interest is 3%) and 40.97%, from 9324.80 up to 13,146 euros (5% interest).
(Unrated) 
Loading ... Written by Carlos Lopez on April 12, 2006 with 2 comments.
# 1, Oscar
Not if the author of the article, or Mr. Caruana long ago not buying a house, but their numbers do not seem to be very up to date (with all due respect to their views, of course). I agree with Mr. Caruana that many years a delay in payment is not desirable, because the final amount of the transaction, but ... how many people can afford to pay a mortgage of say, € 180,000 (and not very high) in 15 years, for example? The same thing I would point in the case of the author's companion article. Why instead of using the ridiculous-with-forgiveness figure of € 10,000, which nobody believes in the mortgage-made no reference to a more current as I have outlined earlier? A greeting