BBVA have some example figures here. Not sure why they won't tell you, maybe ask again but for a specific example rather than how they work it out?
https://www.bbvauk.com/personal-bank...ing-mortgages/
It's an interesting maths problem though so here's how (I think
) you work out!
For the first two years you pay nothing and accrue interest, so at the end of year 2 the loan value is
120,000 * (1.041^2) = 130,041
From then on standard repayments can be calculated using the formula:
Monthly Amount = [Interest * Loan] / [1 - (1+Interest)^-n ]
where n is the number of years to repay
So for 8 years the monthly amount =
(0.041*130,041) / (1-1.041^-8) = 19390 / year = 1616 / month
I'm not sure exactly how BBVA calculate the reduced payment value. If they apply a simple 25% discount then repayments in years 3-4 will be
1212.
You caluculate the effect on years 4-10 as follows:
Over years 3-4 you will be repay (1212*12) = 14546 / year
Loan remaining after year 3 (adding on interest) = ((130041*1.041)-14546) =
120827
And after year 4 =
111235
Therefore the repayments for this remaining amount of 6 years (4-10) are:
(0.0451*111,235) / (1-1.041^-6) = 21289 / year = 1774 / month
There are some good tutorials online on how to build this into a spreadsheet. Then you can compare different amounts and see the effect of interest rates easily.
The only problem is that this assumes that interest rates are constant. BBVA probably adjust interest rates depending on any number of factors which is why the above doesn't quite match up with their examples (it's within 50 pound per month though)