|
our
Adjustable Rate
Mortgage
vs.
Conventional
Mortgage |
To calculate your
monthly payment at 1.25%, you must multiply your loan amount by 3.3.
(100k
times 3.3 = $330. principal and interest)
A payment comparison of our 1.25% one month
ARM plan vs. a 6% fixed plan for a $200,000 loan amount on a 30 year note,
is as follows:
|
Monthly
Principal and Interest Payments For five Years on a $200,000 Loan |
|
|
1.25% |
6% |
Monthly |
Yearly |
|
|
Payment |
Fixed
Payment |
Savings |
Savings |
|
Year 1 |
$660 |
$1200 |
$540 |
$6480 |
|
Year 2 |
$709 |
$1200 |
$491 |
$5892 |
|
Year 3 |
$762 |
$1200 |
$438 |
$5256 |
|
Year 4 |
$819 |
$1200 |
$381 |
$4572 |
|
Year 5 |
$881 |
$1200 |
$319 |
$3828 |
|
|
|
|
|
Total savings: $ 26,028 |
If the total
savings for 5 years were invested at 8% for 30 years, and you quit the
loan after five years, the total accumulated in that account would be
approximately $200,000. This is extra "cash flow"
at your disposal that would not have existed otherwise.
.
