A home loan calculator allows buyers to estimate their mortgage payments, with other calculators available to estimate borrowing capacity and stamp duty. Buying a home is a major milestone and typically the largest, single purchase in the lifetime of most buyers. The mortgage is an integral part of the purchase. Buyers want to make sure they are making the right decisions.
Sourcing as much information as possible prior to purchase, before selecting the property and before applying for a loan can be extremely helpful. A Home Loan Calculator is one of the tools available to assist and support property buyers.
What is a Home Loan Calculator?
A Home Loan Calculator or Mortgage Repayment Calculator is an online device provided by banks, brokers and lenders that offer mortgage services. It is easily accessible and very simple to use without any special knowledge of the financial or mortgage sector.
This tool is a self-serve facility for property buyers to estimate their mortgage themselves. The user enters the amounts or values relevant to their purchase. Making it suitable for suit most mortgage products simply by entering the appropriate interest rate.
These devices are generic, in that anyone can use them. As such, the results calculated are deemed estimates. Users can enter any loan amount, term and interest rate that they choose. These figures are all subject to the lender’s approval of individual applications. The results also do not include lender fees and charges and upfront costs which can vary with lending products and lenders.
Maximising Uses for a Home Loan Calculator
The basic function of mortgage calculators is to calculate repayments. But savvy users can maximise the functionality of the device to obtain additional information to assist their purchase process. When using the tool, a range of figures are displayed – repayment, total loan and total interest.
A self-serve device, all figures can be changed by the user. By changing the interest rate, buyers can quickly compare fixed and variable rates, rates on different lending products and rates from different lenders. Clearly see which offers the most affordable option.
Don’t wait until you hear from your lender when the Reserve Bank makes a change to interest rates. Mortgage holders can use the device to get quick estimates on what their new mortgage payments will be at the revised interest rate. Be ahead of the curve and adjust their household budget accordingly. Start thinking about whether this is the right time to refinance or whether to stay with the current loan and lender.
The tool offers options for weekly, fortnightly or monthly payments. Most mortgage holders make repayments on a monthly basis. But using the tool, you can see what you might save in total interest by paying weekly or fortnightly. See how much the mortgage will cost in total and how much interest will accrue on the loan over the term with different repayment schedules.
The deposit is a big deal when applying for a mortgage. It determines the LVR – loan-to-value ratio, which in turn determines the interest rate and if Lenders Mortgage Insurance is required. The standard deposit is 20%. Low deposit loans can be approved, subject to the lender and application, but at higher rates and with LMI applicable.
- Do you know how much deposit you will need?
- Are you across how the deposit affects the mortgage?
The calculator can assist with decisions around deposits. Vary the loan amount to reflect different deposit amounts. As a guide to the mortgage required, refer to property listings for price indications. Deduct the deposit you have or start with the standard 20%. Note the results for that mortgage amount. Then vary the loan to reflect a larger or smaller deposit. See how a larger deposit means a lower loan amount and reduces both the repayments and the total interest payable.
The device can also be used to assist with selecting an appropriate property, before even stepping inside to inspect! Get a guide to prices in the preferred area and on the type and size of property you are interested in from real estate listing sites.
Use the price guides as a basis for the loan amount less deposit. Calculate the estimated repayments on properties within different price ranges. Quickly see what price delivers a repayment that is within your budget to determine what you can afford to buy. Save valuable time on your property search.
Refinancing is a process that most mortgage holders will need to undertake during their mortgage term. Possibly several times. The calculator can assist in simplifying the process by quickly calculating repayments at different interest rates. Form an idea around switching or staying before speaking with a broker or your lender.
Additional Home Loan Calculators
The effectiveness of the Mortgage Repayment Calculator can be further increased by using in conjunction with other calculators. Use the Borrowing Power Calculator for an estimate of what you may be approved to borrow at current interest rates. This may provide a loan figure to start generating estimates.
The calculators do not allow for costs. Work out the transfer duty on properties you are considering with the Stamp Duty Calculator. If planning to use savings for a deposit and stamp duty, this calculator will provide a useable figure to assist with planning.
Start planning your property purchase by using our Home Loan Calculator for estimates and speak with a Yes Home Loans broker on 1800 000 937 for your rate and mortgage quote.
DISCLAIMER: THE INTENTION OF THIS ARTICLE IS TO PROVIDE INFORMATION OF A GENERAL NATURE ONLY. THE ARTICLE IS NOT PROVIDED WITH THE INTENTION OF BEING THE ONLY SOURCE OF INFORMATION ON WHICH PROPERTY BUYERS SHOULD MAKE THEIR DECISIONS. BUYERS WHO NEED GUIDANCE AND ADVICE ON PROPERTY LOANS BASED ON THEIR INDIVIDUAL CIRCUMSTANCES ARE ADVISED TO CONSULT WITH A SPECIALIST MORTGAGE BROKER OR FINANCIAL CONSULTANT. NO LIABILITY IS ACCEPTED FOR MISREPRESENTATION OF FOR ANY ERRORS IN DATA, POLICIES AND SPECIFIC DETAILS THAT HAVE BEEN OBTAINED FROM OTHER SOURCES.