 |
Definition of 'Fixed-Rate Payment'
The amount due every period by a borrower to a lender under a fixed-rate loan. The fixed-rate loan payments will be equal amounts until the loan plus interest are paid in full. The payment amount can be calculated using the following formula:
Where:
P is the constant payment you make every period
R is the interest rate per period
N is the number of periods
Loan is the total loan amount
|
 |
Investopedia explains 'Fixed-Rate Payment'
To calculate R, take the yearly interest rate and divide by the number of payment periods in a year. For example, if you pay monthly and your yearly interest is 5%, then your interest per period will be (0.05/12) = 0.004167 or 0.4167%.
To calculate N, take the duration of the loan in years and multiply it by the periods in a year. For example, if you have a 25-year loan that you pay monthly, the total periods will be 12 X 25 = 300.
Borrowers usually have the option of either a fixed-rate loan or a floating-rate loan. Some loans can even be interest-only, under which there are no required principal repayments.
|
Search results for 'Fixed-Rate Payment'
-
http://www.investopedia.com/articles/pf/05/031605.asp
... If interest rates are climbing or a steady, predictable payment is important
to you, a fixed-rate mortgage may be the way to go. ...
-
http://www.investopedia.com/university/mortgage/mortgage1.asp
... While some loan types include complicated payment schedules and shifting interest
rates, fixed-rate mortgages are basic loans with much less complex payment ...
-
http://financialedge.investopedia.com/financial-edge/0411/Fixed-Or-Variable-Rate-Mortgage-Which-Is-Better-Now.aspx
... If you're taking out a smaller mortgage - say, $100,000 - the monthly payment
difference between the ARM and the fixed-rate mortgage shrinks to just $80. ...
-
http://www.investopedia.com/university/mortgage/mortgage2.asp
... rate mortgages are much more flexible than their fixed-rate counterparts, enabling
buyers to choose terms that provide a lower initial payment for periods ...
-
http://www.investopedia.com/articles/pf/07/mortgage-payments.asp
... at four common categories of these loans: fixed-rate interest-only loans,
adjustable-rate interest-only loans, fixed-rate graduated payment loans and payment ...
-
http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/interest-rate-equity-swaps.asp
... Policy; 11.32 Setting Dividends; 11.33 Dividend Payment Procedures; 11.34 Stock
Dividends and Repurchases. 12. Securities Markets: 12.1 ...
-
http://www.investopedia.com/articles/pf/05/033005.asp
... For example, a 30-year fixed-rate mortgage with an interest rate of 9% on a
$100,000 home has a principal and interest payment of $804.62. ...
-
http://www.investopedia.com/articles/pf/07/arm-reset.asp
... Saving Your Home From Foreclosure and Are You Living Too Close To The Edge?) You
might change the mortgage into a fixed-rate loan or negotiate a balloon payment ...
-
http://www.investopedia.com/slide-show/5-risky-mortgages/low-down-payment.aspx
... for 5 to 10 years, which gives them a lower monthly payment during this ... to be higher
than the rate you would pay on a conventional fixed-rate mortgage because ...
-
http://www.investopedia.com/university/mortgage/mortgage8.asp
... the monthly payment on a variable-rate mortgage to move higher. Variable-rate mortgages
have lower initial interest rates than fixed-rate mortgages, resulting ...
|
|
