An annualized mortgage constant can be found by multiplying the monthly constant by 12 or by dividing the annual debt service by the mortgage principal.
[1] A mortgage constant is a rate that appraisers determine for use in the band of investment approach.
It is also used in conjunction with the debt-coverage ratio that many commercial bankers use.
The mortgage constant is commonly denoted as Rm.
The Rm could be lower than the interest for a negatively amortizing loan.