what is a repayment calculator?
A mortgage repayment calculator can be a useful tool to help calculate mortgage repayments based on a few different variables:
A mortgage repayment calculator will also tell you how much you will be repaying in total over the term.
why use a repayment calculator?
For those currently looking into obtaining a mortgage it makes good financial sense to use a mortgage repayment calculator so that you fully understand the payment obligations you will have over the mortgage term.
You should also consider looking at an amortisation schedule or chart to fully understand the monthly payments of interest and principle. Charts such as these will show you how you can gradually reduce the debt in increments through instalment payments over the term.
a mortgage repayment example
For example, for those looking at a £165,000 loan to be paid over a 30 year term (that's 360 months) and the interest rate is at 7% per annum, you would have to repay £1097.75 every month. This payment would be made even more quickly by using amortisation options.
As an example, if you added £250 to your monthly mortgage repayment, £2500 as a yearly payment and £5000 as a one-off payment, you could get that debt paid off in less than half the term. However, you do need to consider just how likely such options as these are. Your amortisation chart might be much less but this will still let you clear your debt much faster.
what to think about
As you are looking for your mortgage product, you should consider all contributing factors, such as the APR (annual percentage rate) as well as the monthly fee or rate that comes with your mortgage. You may wish to consider other factors too, such as how flexible your mortgage terms are. You should also consider what it is you are trying to finance: student tuition, a business venture or maybe some home improvements.
If you require more advanced options for your mortgage, it may make good financial sense to consult a mortgage adviser or mortgage specialist. Even though you can now find an online mortgage repayment calculator in seconds to help you calculate mortgage repayment obligations, nothing comes close to speaking with a mortgage expert in person; this is the only real way to get a comprehensive idea of what to look out for when choosing a mortgage product. By speaking with a financial adviser you can also learn how other factors such as stamp duty and mortgage insurance might affect you.
That being said, no matter what your particular situation you can always use a mortgage repayment calculator to ascertain just where you stand before pursuing your chosen path to finding that mortgage or you can read some more independent information about mortgage rates. If you find that you are stuggling to keep up to date with mortgage repayments then you should consider speaking to an advisor on whether an iva or debt advice is suitable.