annual mortgage constant

annual mortgage constant

The amount of annual debt service compared to the principal amount of a loan and then expressed as a dollar amount.

Annual debt service / Mortgage principal = Annual mortgage constant

The constant tells you the total principal and interest payments per year per $100 of debt. (Before the widespread availability of simple financial calculators and computer spreadsheet templates, figures obtained from annual mortgage constant tables were the only quick and reliable way to calculate mortgage payments.)

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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