Rembrandt Mortgage Function
Anybody know the equations used in the Rembrandt mortgage calc function. It
is relatively new (I think) One of its features is that it favors the
lender in that it increases the monthly payment, but decreases the rate of
principle reduction. A neat trick. Don't ask - I'm tying to find out
myself.
Hope I have this wrong - but it is an interesting calc.
take a look at
http://www.bankerssystems.com/ARTA/BL_HMDA.htm
This is the parent company of CCH. They have indeed sold to the financial
market place a very proprietary routine which does exactly as I said -
increases monthly payment and decreases principle reduction.
A simple example:a $30,000, 20 year mortgage at 7.499% yields monthly
payments (using the standard Excel PMT function, as well as just about any
other mortgage calculator around) of $241.66. Looking at the resulting
amort schedule at say 36 months, shows the principle reduced to +/-
$27,887.50.
The Rembrandt calc yields monthly Payments of $241.77, and with the
principle reduced to only $28,059.74.
This is not a large mortgage today. I can't wait to see what some of these
folks with their $500,000 mortgagees will be looking at.
I haven't got a Rembrandt amort schedule yet, but my brother-in-law banker
is getting me one. I thought I'd plot the data in Excel and let it tell me
what the equation was (is). Probably a mess, but what the heck.