mortgage_calculations

www.pathf.com/blogs/2010/02/mortcalc-gem/

Calculates mortgage APR and monthly payments.

INSTALL

$ sudo gem install mortgage_calculations

or add following to your Gemfile

gem "mortgage_calculations", :require => "mortgage_calc"

or add the following to your environment.rb

config.gem 'mortgage_calculations', :lib => "mortgage_calc"

Example:

loan_amount = 350000
interest_rate = 4.75
period = 30 * 12
lender_fee = 800
points = 1.0

mort_calc = MortgageCalc::MortgageUtil.new(loan_amount, interest_rate, total_fees, period)

mort_calc.apr
mort_calc.monthly_payment
mort_calc.monthly_payment_with_fees

Formulas used

Monthly payment with fees

P = [(C + E) r (1 + r)^N]/[(1 + r)^N - 1]

P = monthly payment
C = Loan amount
r = Interest rate
N = Period in months
E = Lender fees

Monthly payment without fees is calculated like above with E = 0.

APR

[a (1 + a)^N] / [(1 + a)^N - 1] - P/C = 0
a = A/1200
N = Period in months
P = Monthly payment
C = Loan amount

Total fees

Total fees are calculated simply by adding Lender fees to the points paid by borrower.

T = E + P(C)