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mortgage 15 vs 30 year
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| def total_saved(monthly_sum, total_years, ror): | |
| year = 0 | |
| total_sum = 0 | |
| year_sum = monthly_sum*12 | |
| while year <= total_years: | |
| year += 1 | |
| total_sum += year_sum | |
| total_sum *= ror | |
| return total_sum | |
| def get_monthly_payment(yearly_interest_rate, loan, years): | |
| monthly_interest_rate = yearly_interest_rate/12 | |
| months = years*12 | |
| numerator = loan*monthly_interest_rate*(monthly_interest_rate+1)**months | |
| denominator = (1+monthly_interest_rate)**months - 1 | |
| monthly_payment = numerator/denominator | |
| return monthly_payment | |
| def thirty_vs_fifteen(ty_interest, fy_interest, expected_ror): | |
| # We use 1 for house value as we're looking for relative numbers | |
| # instead of exact numbers | |
| ty_monthly = get_monthly_payment(ty_interest, 1, 30) | |
| fy_monthly = get_monthly_payment(fy_interest, 1, 15) | |
| ty_monthly_saved = fy_monthly - ty_monthly | |
| ty_savings = total_saved(ty_monthly_saved,30,expected_ror) | |
| fy_savings = total_saved(fy_monthly,15,expected_ror) | |
| ty_net = ty_savings - ty_monthly*12*30 + 1 | |
| fy_net = fy_savings - fy_monthly*12*15 + 1 | |
| percent_benefit = int(((ty_net/fy_net) - 1) * 100) | |
| return percent_benefit | |
| # Dirty string concat just to get a nicer output | |
| print str(thirty_vs_fifteen(0.042, 0.03, 1.09)) + '%' |
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