Amount to Amortize $1 |
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Amount to Amortize $1 |
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The Amount to Amortize $1 (also called the Mortgage Constant and the Mortgage Capitalization Rate) is the amount of money needed to amortize $1 at a given interest rate for a specific period of time.
The Amount to Amortize $1 is the ratio of the periodic debt service to the original loan amount.
Column six of the compound interest tables contain the mortgage constant. This column is also called "Amount to Amortize $1", "Partial Payment", or "Mortgage Capitalization Rate".
The Mortgage Constant (Amount to Amortize $1) is used as a factor to calculate the periodic payment. Payments are usually calculated monthly or annually.
Mortgage payment = Original Principle x Mortgage Constant (from column 6)
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