Mortgage calculator

A mortgage calculator will allow you to quickly see how much your new mortgage will cost you each month. With most mortgage calculators you type in the details of your mortgage such as:

mortgage amount
mortgage term
interest rate

The mortgage calculator will then work out your mortgage payment each month. It may also show the monthly cost of a repayment mortgage as well as an interest only mortgage. Some mortgage calculators will additionally work out how much your mortgage would cost if interest rates rose by say 1 or 2 percent so you can factor in these to your mortgage budget.

The advantage of a mortgage calculator is that it is easily available on the internet so you can look at it at any time and it is free. It is very important to make sure that you can afford a mortgage before applying for one. Using a mortgage calculator and typing in different mortgage amounts, mortgage term and interest rates will give you a much better idea of whether a mortgage is affordable. The last thing you want to do is change your mortgage over and then find out that you cannot afford the monthly mortgage repayments.

As mortgages become more flexible with more options and facilities mortgage calculators have developed to include these extras. Some mortgage calculators will allow you to see the effect of making overpayments. Overpayments are where you pay more than you need to on your mortgages, sometimes each and every month. Making overpayments will reduce the term of your mortgage as you are paying the loan back quicker and so you will pay less interest.

Offset mortgages are still relatively new but they allow you to use savings to offset the interest on a mortgage. This means that notionally you have a lower mortgage and so you pay less interest. Some mortgage calculators will allow you to see the effects of overpayments and offset.