Question

What will be your monthly payment on a $400,000 15 and a 30 yr mortgage if the rate is 4.15%for people with good credit and 13.5% for people with bad credit 4 calculations? Also, how much interest will you pay over the life of the 4 loans you just calculated?  (The mortgage is $400,000 you may have to adjust a bank rate default of 20% down)

Answer 1

Total Mortgage = $400,000

Term of the Loan = 15 and 30 Year

Calculation for Monthly Mortgage for loan with Good Credit:

Monthly Payment = P = L[c(1 + c)ⁿ]/[(1 + c)ⁿ - 1]

Where C = Monthly mortgage rate

L = Loan amount

n = term in months (12*15) and (12*30)

C = .0415/12 = .003458

P = 400,000 * {.003458* (1 + .003458)^180}/{(1 + .003458)^180 - 1}

= 2988.82

Similarly, P when N = 30 *12 = 360

P = 1944.32

Now When the Credit rating is bad for the Client,

C = .135/12 = 0.01125

Now Calculating P when n = 15*12 = 180

P = 5193.27

Calculating P when n = 30*12 = 360

P = 4581.64

Amount of Interest Paid on Four loans is given in below table

Interest = Monthly Mortgage * n - Loan Amount(L)

Interest Paid	N=15	N=30
Good Credit	537989	699955
Bad Credit	934789	1649394