Setting up a Canadian mortgage in GnuCash

[Cam Ellison]

Dawning Sky wrote:
> 

> So basically you're saying even though you're required to make a monthly 
> payment to the lender, the lender only applies those payments to your 
> account every 6 months?  This is simply unfair.  Of course, if they're 
> required to apply your payments immediately as you pay them, they 
> probably will increase the nominal rate to cover this "loss".

No, that's not it.  The interest component of the payment (whatever the 
payment schedule is) is calculated in such a way as to yield one-half 
the nominal percentage every six months, instead of yielding the full 
percentage every year.  Interest owing is calculated on the basis of the 
period.  Thus, the interest paid weekly (where that is the payment 
period) on a nominal 6% mortgage is 0.11313% in Canada, and in the US 
(and elsewhere) is 0.11181%.

Does that make more sense?

Cam

-- 
Cam Ellison, Ph.D. R.Psych. #1417

Cam Ellison & Associates Ltd.
3446 Beach Avenue
Roberts Creek BC      V0N 2W2
Phone:           604-885-4806
Fax:             604-885-4809