Calculating a Canadian Mortgage HP10BII Norair Yeretsian

Here is a sample of a Canadian Mortgage calculation on the HP 10 B II , with
the appropriate keystrokes so that you too can reproduce these results.

Sample illustration A :

A property is sold for $ 4,250,000 in Toronto, Ont, Canada and the buyer needs
to  finance it. He approaches a mortgage lender and a package is prepared and
presented to several lenders. One lender offers :  a 65% loan to value ,
with a 5 year term mortgage  and 21 year amortization with monthly payments
with  monthly payments (representing both principal and interest ;
at an interest rate of    8.25 % .

Make sure your first clear all [shift] [C] this resets the calculator to zero.

We must next convert the interest rate from the stated rate 8.25 % to the
appropriate rate which will assist us in getting the correct Canadian monthly
payment, based on a semi-annually compounded  not in advance arrangement
as per Canadian law for blended rate mortgages of principal and interest.

8.25 [ shift] [ Nom%]

2 [shift] [P/YR]

[shift] [EFF%] … displays shows : 8.4202

12 [shift] [P/YR]

[shift] [NOM%] … display shows : 8.1117 this is now parked in [I/YR]

This 8.1117 , is the HP Canadian Mortgage Factor .

The balance of the TVM menu Icons can now be populated
with the appropriate data.

21 [shift] [N] display shows : 252

present value of the mortgage amount $4.25 million x 65%= 2,762,500 loan amount

2,762,500 [ PV] display shows : 2,762,500

0 [FV] display shows : 0

solve for the payment by pressing : [PMT] display shows : - 22,859.30

We can multiple this by  [X ]  12 , which will give us the Annual Debt Service.

ADS = 274,311.64

To get into the Amortization Schedule of the Calculator, we simply press …

[shift] [ Amort ] on the display we see :  (1-12) ,
this represents the full first year : EOY1 numbers ,
Then we press [ = ] display shows Principal payments .
When we  press [ = ] display shows Interest payments.
Then we press [ = ] display shows Balance outstanding for the EOY1 .

By pressing [shift] [Amort] : (13-24) , we get EOY2 numbers, and
again [=],[=],[=] …

If we wanted the EOY5 numbers ; we would press the following ;

1 input 60 [shift ] [ Amrt ] gets us to the end of year 5 :

display shows : (1-60)  [=] 308,437.84 principal amount paid over 5 years

[=] 1,063,120.37 this is the total interest payments paid over 5 years.

Again ; [=] gives us the Balance outstanding at the end of 5 years :
2,454,062  EOY5

Let’s put it all into a Mortgage Schedule :

……………… Principal ………….Interest ……….Balance

EOY1… ….$ 52,137 ………….$ 222,175 ……..$ 2,710,363
(1-12)

EOY2…  ...$ 56,527 …………$ 217,785 ……$ 2,653,837
(13-24)

EOY3 … …$61,286 …………$ 213,025 …….$ 2,592,550
(25-36)

EOY4…….$ 66,447 ………..$ 207,865 ……..$ 2,526,104
(37-48)

EOY5 ……$ 72,042 ………..$ 202,270 ………$ 2,454,062
(49-60)

Totals …$ 308,438 ……..$ 1,063,120 ………$ 2,454,62
(1-60)

Hope this works for you. If you have any suggestions for improvement
sent us a comment below or Twitter @ EnvoyCapRealty

nyeretsian@yahoo.com       June 5, 2010