Amortization: The Mortgage Professor #5

Almost all mortgages today have fully-amortizing payments. This is a payment which, in most cases, will pay off a loan over its term.

[davidlr]

It’s also worth noting that when comparing interest saved by paying down the loan to other investments, any interest saved on the mortgage is not taxed, while interest earned through investments will be taxed

[bubblydiana]

He got the $477.42 from the Amortization Chart which illustrates monthly payment per $1000 of a Mortgage. The chart is available online.

[GOEZDYN]

The benefit of paying additional might be undersold @ 4:21 as 13 months and 101 months were conservative estimates if I calculated correctly. I got 15 months and 109 months using your $100K at 4% example.

[howtodiy]

Thank you so much! Finally I understand how it works. Great video! You unswerving my questions 🙏👏

[alistaircollins]

What a cool video! I actually thought that was a real professor. LOL

[kushpyro]

Here from Mukta Mani ma'am's refernce video on Loan Amortization ;-;

Jaypee gang anyone?

[mkunltd]

Hi Jack
Beautiful video explaining this process.
One question that came up was
At 1.50 of your video
You calculated monthly payment as 477.42. How is this amount calculated?

[brekiarnz]

This is confusing.

1. How did you come up with $477.42?
2. The 4% rate per year is strange. If you're paying $333 that's a lot higher than 4%. Banks could say a loan is 2% and 1% and just compound it on the back end every 6 months and 3 months, respectively, and it'd mean the same thing. But the actual amount is $333/$477.42 ~70%!

[JonnieFuzz]

I can't believe only 44, 000 views for this 5 year old video?!? However... it makes sense. 🙄

[nikhil.manudhane]

Sir, in countries like India, the rate of interest for home loans is lower than some investment avenues.. Is it still advisable to prepay the loans instead of investing in such options?