Fixed amortization with increasing interest
A guy showed me an amortization schedule with fixed principal amortization each period but the interest part increases each period so payment due is larger in each consecutive period. What is the technical name for this kind of schedule?
rawraw
April 4, 2018, 8:32pm
#4
Is it because the principal payments are lower than the mandatory amounts? If so, that would be capitalization of interest
Yea I ain’t clicking that.
elcoelhon:
Fixed amortization with increasing interest
A guy showed me an amortization schedule with fixed principal amortization each period but the interest part increases each period so payment due is larger in each consecutive period. What is the technical name for this kind of schedule?
its common (normal) in switzerland to have a fixed rate & this wonkey mortage…
https://en.wikipedia.org/wiki/Continuous-repayment_mortgage#Calculation_of_interest_rate
interest is tax deductible, so I think it’s setup like this to have constant tax effects as the principle on the fixed loan reduces.
but I know zero about mortgages, so could be totally wrong.