# Mortgage amortization schedule issue

I wrote a program that does a mortgage schedule. When comparing it with other online sites that are doing the same calculations I seem to be off $0.01 on every payment except the first. Here is an example: • Loan Amount:$398,483
• Interest rate: 3.12
• monthly interest rate (mi): 0.0026 = (rate/12/1000)
• Length in months: 10
• Payment (c): 40,420.35

Payment schedule I came up with:

Payment 1:
Beginning Balance b1: $398,483 Interest:$1,036.06 = 398483 * 0.0026 = b1*mi
Principal: $39.384.29 = 40420.35-(398483* 0.0026) = c-(b1*mi) Ending Balance:$359,098.71 = 398483 - 39384.29


And these are my steps

Pay-   beginning
ment   Balance     Interest   Principal   Ending Balance (eb)

1      398,483.00   1,036.06   39.384.29   359,098.71 = eb1 -> b2
b1        b1*mi     c-b1*mi   b1-(c-b1*mi)

2      359,098.71    933.66   39,486.69   319,612.02 = eb2 -> b3
b2        b2*mi     c-b2*mi   b2-(c-b2*mi)

3      319,612.02    830.99   39,589.36   280,022.66 = eb3 -> b4
b3        b3*mi     c-b3*mi   b3-(c-b3*mi)

4      280,022.66    728.06   39,692.29   240,330.37
5      240,330.37    624.86   39,795.49   200,534.88
6      200,534.88    521.39   39,898.96   160,635.92
7      160,635.92    417.65   40,002.70   120,633.21
8      120,633.21    313.65   40,106.70    80,526.52
9       80,526.52    209.37   40,210.98    40,315.54
10       40,315.54    104.82   40,315.53         0.01


Findings

• On payment 2 I have an ending balance of: $319,612.02 but other sites have an ending balance of: $319,612.01

• I'm not sure how: $359,098.71 -$39,486.69 = $319,612.01 I assume I'm doing some of the math incorrect but i'm not sure what. However, my interest, principal are all correct it's just the end balance starting with payment 2 is incorrect and I'm not sure why? Maybe someone can tell me what i'm doing wrong? EDIT 1 Added the math for the first 3 payments to show the math i'm using. If needed I'll finish the rest of the payments later. However, you can get an idea of how I get the rest of the payments. Also like I stated, it's payment 2 is where it starts to become$0.01 off.

• You need to provide details of the way you are doing the calculations for anyone to be able to comment. – Moo May 28 '16 at 22:26
• Your calculations are correct, as your details. Go to Bretwhissel loan calculator to verify that. (just type in google: Bretwhissel.) – Rafiq May 29 '16 at 1:03
• So my math is correct. Other websites seem to eat the penny on the second payment(except Bretwhissel)? So the mortgage company will eat the penny at the end of the loan in most cases? – null_pointer May 29 '16 at 3:32
• Can someone clarify the word principal - i thought principal is the initial debt (in the example the loan amount of \$398,483 == principal). To my understanding the column with the formula c-b1*mi should not be labeled principal. It seems that there is no word for the portion of each payment c that is applied towards the principal balance. Using minuend - subtrahend = difference the subtrahend would be b1*mi and the difference is the amount applied to the principal. – surfmuggle Mar 14 '17 at 22:45