It doesn’t matter whether you’re re-mortgaging or taking out your first mortgage, a mortgage calculator can be a really useful tool.
With the current economic climate and personal finances being at the forefront of many people’s minds at the moment, people are looking to try and save money wherever they can.
In the essence of saving money people are more actively checking to see if they are getting the most competitive mortgage rate with their current mortgage lender or if they are more likely to save money if they move elsewhere.
When analysing new mortgage options a mortgage calculator can be great for giving you an indication of how much your repayments will be and how much interest you will have to pay with that chosen deal.
The important word in the above paragraph is “indication”, please remember that the information that you get from a mortgage calculator is not concrete but it should only be used as guidance.
One main advantage of using a mortgage repayment calculator is that they are completely free to use and available to anyone on the internet.
To use a mortgage repayment calculator you’ll need to know some basic pieces of information including the interest rate, loan amount and term of the loan.
The loan amount and term depends on the house value and how long you think it will take for you to pay off the loan. The interest rate will be available from the lender directly.
Some mortgage calculators are more complicated than others and they will take into account other repayable aspects such as insurances and taxes.
To use the mortgage calculator effectively you should firstly do your research and get a handful of mortgage deals together that you would be interested in.
When you have the information you can then use the repayment calculator to see how much your monthly repayments would be and you can adjust the term and loan amount accordingly to find your ideal repayment amount.
You can also use the mortgage calculator to see how much you would be eligible to borrow based on your yearly income, it will give you an idea of the mortgage value that you can afford.
However, the amount you can borrow depends on many other aspects including the amount of cash you have available for a deposit and any other debts you have.
Mortgage calculators are great free financial tools that allow you the freedom to work out what repayment and mortgage strategy is best for you. The next time you think about re-mortgaging or taking out a new mortgage try using a mortgage calculator to help you.
Guest post by Andreas, who is a personal finance blogger for moneysupermarket.com.