A mortgage-style loan has a fixed monthly payment for the full loan term — each payment covers both principal and interest, similar to a car loan or home mortgage. It's one of the simplest loan structures to model in Aurora and is also used as a component within the Mortgage-Style w/ Incentive Paydown loan type.
How to create a mortgage-style loan
- Go to Database > Financing products and click Add financing product.
- Enter a name, select a project type, and choose Loan as the financing type. Click Add.
- Click Add Loan.
- Set Loan type to Mortgage-Style.
Configure the following fields:
- Name — The loan label in Sales Mode.
- Principal — Percentage of system cost financed. Typically 100%.
- Flat fee — Optional fixed dollar amount added to the loan principal.
- Dealer fee — Lender fee as a percentage of the financed cost.
- Incentives apply to dealer fee — Enable to include the dealer fee in incentive and tax-basis calculations.
- Interest is tax deductible — Enable for HELOC or PACE loans where interest is deductible.
- Interest rate — Annual rate from your lender.
- Duration — Loan term in months.
- Loan can have a prepayment — Toggle on to model an optional prepayment. Reveals two sub-fields: Amount (the percentage of the loan that will be paid off early, entered as % of financed amount) and Month (the month the prepayment is paid to the lender and the loan is reamortized).
- Click Save.
Pro Tip: the principal and interest payments for a Mortgage-Style Loan will return the same values as the IPMT and PPMT functions in Excel. You can easily replace excel workbooks with Aurora financial modeling.