## CalculatorsInterest FAQExcel templates

 Basics:  Yield  Net Present Value
 Effective rates:  Savings Plan  Credit
 Loans:  Repayment Plan  Early repayment charge
 Retirement provision:  Pension by lump sum payment  Withdrawal plan

# Repayment plan, effective interest and early repayment charge

## Online calculator for a repayment plan

You can build a repayment plan, also called amortization schedule, on the basis of the nominal interest. Here, the interest is variable and a change of interest rates is possible. Special repayments can be included into the repayment plan. The effective interest and an early repayment charge can be calculated.

## Basic mortgage conditions:

 Name of the creditor: Nominal interest rate: % Credit sum: Amount of monthly payments: or Disbursement date: 1.15.JanFebMarchAprilMayJuneJulyAugustSeptOctNovDec19801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020 Initial repayment ratio(%): acc. Payment 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20% 25% 30% 40% 50% 100% Duration(months/years): 12/1 24/2 36/3 48/4 60/5 120/10 180/15 other duration:

## Repayment plan--> Result

 Nr. Date Debt previous month Interest rate Payment Special repayment Interest Repayment New debt 1. 2009-04-01 100000.00 433.33 2676.67 97323.33 2. 2009-05-01 97323.33 421.73 2688.27 94635.07 3. 2009-06-01 94635.07 410.09 2699.91 91935.15 4. 2009-07-01 91935.15 398.39 2711.61 89223.54 5. 2009-08-01 89223.54 386.64 2723.36 86500.17 6. 2009-09-01 86500.17 374.83 2735.17 83765.01 7. 2009-10-01 83765.01 362.98 2747.02 81017.99 8. 2009-11-01 81017.99 351.08 2758.92 78259.07 9. 2009-12-01 78259.07 339.12 2770.88 75488.19 10. 2010-01-01 75488.19 327.12 2782.88 72705.31 11. 2010-02-01 72705.31 315.06 2794.94 69910.36 12. 2010-03-01 69910.36 302.94 2807.06 67103.31 13. 2010-04-01 67103.31 290.78 2819.22 64284.09 14. 2010-05-01 64284.09 278.56 2831.44 61452.65 15. 2010-06-01 61452.65 266.29 2843.71 58608.95 16. 2010-07-01 58608.95 253.97 2856.03 55752.92 17. 2010-08-01 55752.92 241.60 2868.40 52884.52 18. 2010-09-01 52884.52 229.17 2880.83 50003.68 19. 2010-10-01 50003.68 216.68 2893.32 47110.36 20. 2010-11-01 47110.36 204.14 2905.86 44204.51 21. 2010-12-01 44204.51 191.55 2918.45 41286.06 22. 2011-01-01 41286.06 178.91 2931.09 38354.97 23. 2011-02-01 38354.97 166.20 2943.80 35411.17 24. 2011-03-01 35411.17 153.45 2956.55 32454.62 Sums: 74640.0 0.0 7094.6 67545.4
Any warranty for the correctness of the numbers is excluded.
Spreadsheet template for the computation of a amortization schedule -->

## Nominal--> Effective interest rate:

 If you have changed the repayment plan, you should first compute the plan again. Then the interest rate changes and the special repayments are saved and will be included in the calculation of the effective interest.
Even if you don´t add any extra expenses, the calculated effective interest is different from the nominal interest. The reason is that the effective interest is calculated with daily interest capitalization according to the ISMA method.

## Early Repayment--> Redemption penalty

 After changing the repayment plan, you should always recalculate it to save the changes. The repayment plan should be calculated with all possible additional repayments, because they reduce the early repayment charge. The repayment plan should only cover the period in which the interest rate is fixed. Changes of interest rate are not possible with the computation of the redemption penalty because the redemption penalty arises from the fixation of the rate.
 For most amortized loans, the interest rates are fixed. These loans are called fixed rate mortgages (FRM). The firm interest rate has the advantage for the borrower that they can plan their monthly payments in the future. If the interest rate in the capital markets rises they have an advantage since their payments remain constant. But in case the interest rates falls they will not take profit from that. If a loan agreement is quit prematurely, compensation is necessary - the so-called "early repayment charge" or "redemption penalty". A currently lower interest rate leads to a payment by the borrower. If the interest rates have risen the creditor will gladly accept the early repayment or will even grant compensation.

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