As you can imagine, doing this by hand is quite painful and error-prone.
For social security, you have to get certified by a completely different set of bureaucrats with partially incompatible requirements:
The simplifications, they are additional! (Usually.)
Also don't get me started that I can't use an api to get my account details and statements in Canada.
Variable rate throws it out of whack of course.
New schedule is calculated with new rate and consists of payments till the end of the term, with additional info about interest and principal amounts.
Same if you do additional payment into the principal - they will give you a new schedule.
Say your mortgage is 300,000 and rate 5%. You would pay 15,000 in interest. Subtract from your total yearly payment say 25,000. You pay back 10,000 a year divide by 12 for months or payment period to get the amount.
It may not be authoritative but you can start with https://laws-lois.justice.gc.ca/eng/acts/i-15/page-1.html which should be.
First, they renew their interest rates every 5 years over a 20-30-40 mortgage. Think of it as mandatory refinancing.
Unlike the US where a homeowner can lock in a low interest rate for a very long time.
The U.S. is an anomaly with these loans. Most countries don't do this 30 year fixed low rate mortgages like the U.S. It simply doesn't make sense for lenders to underwrite long loans at low rates.
As 2008 taught us, other ways can come up to try and make money.
Variable rate mortgages were a better bet 88% of the time between 1950 and 2000:
* https://wowa.ca/static/fixed-vs-variable-study.pdf
Post-2000 variable did fairly well as well.
It's the recency bias of the last 1-2 years that have people really freaking out about it.
Typically, you decide on how you are going to approach the interest rate, and for how long. Owners can lock in for a fixed interest rate, or a variable rate that changes with prime. Term is most often 5 years, but latesly shorter or more flexible mortgages are more popular, sometimes between 2-4 years, and some folks who might take a risk on a 5+ year mortgage rate.
The variable rate mortgages out performed fixed rate mortgages for nearly 15-20 years. The tables turned in the past year or two.
during the re-up you can throw down extra money, but that's because it's an open contract, essentially.
It has historically been used to allow for bonds to have uniform repayments across maturities (when the principal of a bond becomes due) - useful in the context of a bank wanting to hedge risks such as interest rate risk, repayment risk (if the bond is callable it can be paid back early, which means the bondholders have cash yielding ~0% instead of whatever the bond yield was)
Mortgages, though not traditional bonds (in that it's not a sophisticated company borrowing) are, depending on the jurisdiction, treated as bonds because they get packaged up and sold as bonds - the underlying bit of financial engineering that, after serious perversion, gave us the 2008 credit crisis
Some sample calculations at:
* https://www.bondsavvy.com/bonds/accrued-interest-calculation
See also perhaps:
One option is to call the mortgage department and ask them to provide the split. When I asked the agent why I couldn't see it online, she mentioned their system is not setup to show this information. No idea why. Pretty frustrating.
Also don't get me started that I can't use an api to get my account details and statements in Canada.
A brief search reveals that Canada is of course missing from https://en.wikipedia.org/wiki/Open_banking
Literally in the news as we speak!
https://globalnews.ca/news/10195005/canada-banking-changes-2...
What it ends up looking like, who knows.
Was also part of the implementation phase in the UK and the regulatory powers there definitely sped things up.
<Rant> I tried to get API access to my bank account and was told by my bank that Open Banking is not for physical persons. I tried to the same for my nonprofit and was told that only licensed PSD2 TPPs ("third-party providers") can use it. The national bank issues those licenses, but provides no information on what the process for obtaining one is. I called some friends and got in touch with someone at a major payment services provider, who explained that to get their license, the national bank insisted on them having essentially unlimited-coverege insurance - something no insusrer in the country was even willing to sell at any price. They managed to get the insurance from elsewhere in the EU and whole process cost them "six figures". Even after that, you still don't get full access to their own accounts, because the whole API is built on the idea of connecting customers with fintech apps, so there are a bunch of limitations intended for privacy and security that don't make any sense in a "I want full access to my own account" scenario. All the advice I got was "just keep scraping". How the fuck do they dare call that "open" banking?!? </Rant>
Or do you see any conclusions about "money APIs" that can be reasonably made from crypto?
Mortgage Calculators are sadly something that appear to need to be build by hand in Excel
Maybe this is just one little upside of mortgage terms in the US being dictated mostly by the gov't through fannie mae and freddie mac.
Can you do that anywhere else? Even under the EU's "open banking" system, this is basically impossible unless you use an intermediate that charges absurdly high fees, because they themselves had to pay hugr licensing and insurance fees to be granted access to the "open" APIs. The only other way is scraping, which I imagine is just as possible in Canada as everywhere else.
If they aren't providing you complete information there is probably a Canadian authority you can reach out to, though you may just need to go higher up the food chain at your bank - accounting can be a little arcane and the people you are speaking to may simply not know.
That being said being off by tens of dollars is absurd, the error is likely in your calculations, and I feel it is their duty to make how they calculate your interest owed plain to you.
I've also struggled through figuring it out on my own, and the two things that got me to less than a dollar of difference were: 1) "Mortgage" in Canada is a specific legal term used for fixed term mortgages that compounds every 6 months. Therefore, to get your effective annual you take you have to convert it: ((1 + nom_rate/2)^2)-1 2) You then take your effective rate, divide by the days in the year to get your daily rate. You then take your daily rate, multiply it by your outstanding principle, and multiply it by the number of days since your last payment. That result is the amount of interest you pay, and the rest of your payment goes to pay down principle.
In practice, I have a monthly payment, and just divide my annual effective rate by 12, and call it close enough. The extra precision of daily vs monthly isn't worth the extra complexity in the spreadsheet.
I completely disagree. Then you're just handing them a mechanism to make this as complicated as they possibly can. Taxes should be simple enough to be fully understood by the people paying them.
I'm not some algorithmic tool for the government to abuse when it's failed to balance it's budgets and I should not _need_ software to figure out something so basic as a deduction in wages.
> doing this by hand is quite painful and error-prone.
It's a shame there isn't a law forcing the government to make this possible.
If it needs such a thing it is too complex and should be repealed
For example, it was deemed "impossible" to adjust student loan interest rates, because the software would take two years to modify. Either they are completely incompetent, or they are deliberately lying for political reasons.
So yeah, refusing a law because it is "too complex" won't work either.
The only way out is by accepting that the current state is unacceptable, and working on a long and slow fix, during which we don't say "this is unacceptable therefore we require immediate changes". This will fuck people over. But not making those changes properly will fuck people over even more.
We might be on an administrative brink. That takes a radical approach to fix.
For example, Germany has one of the most complex income tax codes in the world, with an average compliance burden of 136 hours[1]. That's a hit to national competitiveness and GDP, and worth addressing in its own right.
Once you have that complexity, you'll always be taking away something from somebody by simplifying.
So all simplifications end up as additional "if" clauses, defeating the purpose.
Unfortunately there will be an input layer that requires predicates or measurements that cannot avoid ambiguity.
Ignoring that, there's Godel's Incomplete Theorem to deliver the final blow. If integer arithmetic cannot be complete and consistent, a set of laws governing society has no hope. If you disagree, you'd at least have to admit that such a set of laws could not include integer arithmetic, and could certainly be no more complex than integer arithmetic. I'd posit that such a restriction renders such a project impossible.
We've chosen completeness (every action can be rendered legal or illegal) over consistency. The alternative - consistency - would make some actions legally undecidable.
You will need the historical formulas, as well as all the underlying data, not even accounting for the publication delays and errors, missing informations, discretionary classifications, etc.
What we need is all that data and code in an introspectable flow of code and data:
<downvote>a blockchain, containing both your data and the smart contract used to perform the computations</downvote>.
There are likely some digital government projects and software providers who's software might be a good fit for this kind of thing.
I remember in my pursuit of learning about change management and digital transformation, someone tried to explain that too many bureaucracies ultimately have one goal - to ensure their survival at any cost. Maybe not so different than politicians in that way.
But yea, I was joking :)
https://github.com/canada-ca https://github.com/statcan
The Bank of Canada even has one where they host various economic models