Home Mortgage Calculator
The Home Mortgage Calculator is a Valuable Tool
A home mortgage calculator is a great help when you need to find out how much you can borrow. This can be a complex and sometimes daunting task because people aren't always familiar with the criteria lenders apply when calculating serviceability.
One type of home mortgage calculator, called the comparison home loan calculator, is invaluable when looking for finance, simply because there is such a variety of home loan products to choose from across a wide range of different lenders and all of them have different interest rates.
Mortgage Calculators serve as a great research tool and can be used to ascertain how much you can borrow before you actually talk to a lender. It's important to remember though, that lenders all have different qualifying criteria so your borrowing capacity can differ between lenders too.
A Mortgage Calculator enables potential borrowers to determine the best home loan based on the amount of the mortgage, the term of the mortgage, and the interest rate. It is an important self-help tool that will calculate your borrowing capacity and let you know your minimum monthly installments (interest only or principal and interest), but home mortage calculators generally do not factor in the on-going costs of any loan.
It's important to note that a mortgage calculator will only reflect the quoted interest rate, and it will not take into account the costs or fees associated with the loan. For example:
- If you input $100,000 @ 7.95% into the mortgage calculator the simple monthly interest would be $662.50
- There is no provision to input costs into the mortgage calculator.
- If you have an $8 per month fee then the monthly cost to you will be $662.50 + $8 = $670.50
- This equates to an interest rate of 8.04% p.a.
A Payment Analyser home loan calculator will assist borrowers in calculating their future mortgage repayments for several payment frequencies (monthly, fortnightly, weekly). The mortgage calculator will show how many years the life of the loan will be shortened by if you do in fact pay more frequently (for example fortnightly as opposed to monthly).
With the help of a mortgage calculator, borrowers can clearly see the impact made on their monthly loan repayment amounts should they decide to switch their rate from variable to fixed, make additional repayments, vary the term of their loan or change from one loan product to another. The impact of such changes can be quickly established and decisions can be made.
So, while it makes perfect sense to use a mortgage calculator whenever you are considering applying for a mortgage or reviewing your mortgage, the calculators are only a guide and it is always best to seek professional advice.