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How the monthly payment is calculated

With equal total payments (本息平均攤還) each instalment is P × r ÷ (1 − (1 + r)^−n), where P is the balance, r the monthly rate (annual rate ÷ 12) and n the number of months left. Every month the interest is balance × r and whatever remains of the instalment repays principal, so the interest share shrinks as the years pass. With equal principal (本金平均攤還) you repay the same slice of principal every month and add that month's interest on top, so the first payment is the highest and each later one is slightly smaller. When the rate moves to the second stage, the instalment is recalculated on the remaining balance and months, which is also how Taiwanese banks handle a rate change.

What a grace period does

During a 寬限期 you pay interest only, so the balance does not move. Once it ends the whole principal has to be repaid in the months that are left, which is why the payment after the grace period is clearly higher than a loan without one, and the total interest is higher too. It suits people who need lighter payments in the first years, as long as the later instalment is affordable.

Things to know

• Equal total payment keeps the amount fixed and easy to budget; equal principal costs less interest overall but starts with a heavier payment.
• The 新青安 youth housing loan uses a two-stage subsidised rate, a term of up to 40 years and up to five years of grace. Enter its published rate, term and grace period here to estimate it.
• The yearly summary groups twelve months at a time; open the monthly schedule to see how much of each payment is interest.
• A floating rate follows the bank's index rate later on, so the result only describes today's rate staying unchanged.

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