Mortgage revision calculator

In a variable-rate mortgage, the interest rate consists of a differential plus a reference rate (typically the 12-month Euribor). Therefore, unlike in fixed-rate mortgages, the payment amount could increase or decrease in each interest rate revision in accordance with the change in the reference rate.

The payments are calculated using the French repayment system. With this system, the payment is calculated at the beginning of each interest period and does not vary throughout this period. It could vary from period to period or during a same period if making a partial repayment.

We use the following formula in the French repayment system: 

Payment = (C * i / m) / (1 - (1 + 1 / m) EXP(-m * n))

Where:
C: outstanding principal on the loan
i: nominal annual interest rate
m: number of annual payments
n: number of years in the repayment period

Let's look at an example using the formula. If you have a loan of €150,000 at an annual interest rate of 2.50% and you repay it on a monthly basis (12 payments per year) over 25 years, your monthly payment will be €672.93.

Here is the formula, with the sample figures: 

(150,000 * 0.025 / 12) / (1 - (1 + 0.025 / 12) EXP(-12 * 25)) = €672.93

With the calculation system we use (French repayment system), more interest than capital is paid in the first installments and more capital than interest in the last.