Mortgage Constant

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The Mortgage Constant (also called the Mortgage Capitalization Rate) is the ratio of the periodic debt service to the original loan amount.  The Mortgage Constant is generally based on an annual amount.

 

Column six of  the compound interest tables contain the mortgage constant.  This column is called "Amount to Amortize $1", "Partial Payment", or "Mortgage Capitalization Rate".

 

The mortgage constant includes principal and interest so it is always higher than the interest rate.

 

Mortgage payment = Original Principle x Mortgage Constant (from column 6)

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