The Constant Annual Percent, also known as the Mortgage Constant, is the ratio of the annual debt service (which includes both principal and interest payments) to the original loan amount.
The Debt Service Constant, also known as the Mortgage Constant, is a measure used in real estate finance to determine the annual debt service (principal and interest payments) payment required per dollar of the loan amount.
Debt Yield is the Net Operating Income (NOI) divided by the amount of debt, primarily used by lenders to determine the sufficiency of a property's income to cover its debt service.
A level-payment mortgage is a type of mortgage that requires the same payment each month (or other period) for full amortization. This means that the amount paid in monthly installments remains constant over the life of the loan.
The Loan Constant, also known as the Mortgage Constant, is used to analyze the burden of debt repayment on a property and measure its ability to generate earnings sufficient to cover mortgage payments.
The Mortgage Constant is derived by dividing the total annual mortgage debt service, including both principal and interest, by the initial loan amount. It provides a useful way of calculating the annual cost of a loan as a percentage, making it easy to compare different mortgage options.
The mortgage constant is the percentage ratio between the annual debt service and the outstanding loan principal. It reflects both the interest and the amortization components of a loan and is used extensively in real estate to determine the annual loan payment.
Principal and Interest Payment (P&I) refers to a periodic payment, usually made monthly, that includes the interest charges for the period plus an amount applied to the amortization of the principal balance, commonly seen with amortizing loans.
