About a bond calculator. My daughter lives in Dubai & bought a house there. I gave her some advice about bonds. Here is an email I sent her:

I was thinking about that bond repayment calculator last night. I saw there was a monthly interest, capital balance display from a button. I wanted to see what happens if you pay in your annual bonus as against simply paying in slightly more each month. That display does not allow you to enter such payments. I Googled for a better one & came upon this:

http://www.learnmoney.co.uk/mortgages/mort-04.htmlI have set it up for 1 000 000 at 8,5% over 20 years. The monthly repayment is then 8 678. Then go down to the payment schedule for month 13. We will add a lump sum extra payment in column F. Note month 14 interest is currently 6 930.06 Now enter 100 000 into row 13 col G. See the interest for row 14 now becomes 6 221.73 There is a nice graph showing the down step in the capital outstanding. The period remains 20 years. This is what I was wanting to show you yesterday. The thing to clarify is how does it work like this in Dubai. Yesterday’s graph did not cater for a single lump sum payment like this. There is a field at top right Variable or Fixed rate. See the dramatic difference that makes. I suspect you will be on variable. You can fiddle with the years the interest rate remains fixed & the escalation to see the difference in the graph.

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In the graph the total that you pay is the rectangle with the 2 ends of the graph as the diagonal.

What you pay as interest is the area under the graph.

What you pay as capital repayment is the area above the graph.

So you can see in the early years you are paying huge interest & very little capital repayment.

It is the length of the vertical line - how much is below the graph & how much is above the graph?

In last few years the interest forms very little of the payment and it is mostly reducing the capital amount.

I then show what happens if you pump in extra money. The example I give shows exactly how it works. It puts a step change into the graph so from then on you score by paying less interest & more capital each time.

The graph shows nicely how the area above the graph is increased (capital) & the area below the graph is reduced (interest).

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It will be brilliant if you can get a bond so that part of your monthly expenses becomes an investment.

You are prevented from doing moonlighting work by the regulations. Getting a 'fixer-upper' you will be able to circumvent that restriction.