Selling a house and Interest rates

V

v-gruane@mic

Guest
My partner and myself bought a 2 bedroomed dulpex house nearly 4 years ago and we plan to sell it in July/Aug of this year.

We took out a mortgage of €166K and the house is now worth about €275K. My partner argues that we have only been paying off the interest over the last 4 years and that we have made nothing else from the repayments we have made but is that true? (Last years end of year statement said it the balance was down to around €159K?)
 
Well if the balance is €159k and the house is worth €275k you have equity of €116k. Subtract whatever your down payment and buying costs (legal, stamp duty etc.) were and that's what you've made thanks to the miracle of house appreciation!
 
Unless you had an interest only loan then some of your repayment each month would have been going towards repaying the capital. The fact that your balance has decreased from E166K to E159K would seem to confirm that you did not have and interest only loan and were in fact repaying some capital.
 
Using Jeacle's mortgage calculator, the workings up to January 2006 are as follows:

Total interest paid to date €28,890
Total capitla paid to date €11,473

Total payments €40,373

Balance outstanding=€166,000-€11,473=154,527

Assumptions:
Interest rate 4.5%
Term 30 years
 
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