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Home Loan Calculators & Mortgage Calculators

Home loan calculators are convenient tools available to anyone wanting to learn more about mortgages. You are able to assess with a few clicks of your mouse how your mortgage repayments might change in the event of a change in mortgage interest rates.

You can also use a home loan calculator to determine your borrowing power. Understanding the maximum possible loan amount you’re eligible to apply for allows you to focus on properties that fit within range of your personal level of affordability.

However, home loan calculators are able to do much more for you than just figure out your repayments. Let’s look at some other factors that might become important while using online mortgage calculators.

Purchasing Power

The amount you borrow from a bank is usually not the same thing as the purchase price of a property. Calculating the total costs of buying a home can be equally as important as calculating the repayment amounts. This way you won’t be up for any surprises when settlement day arrives.

Lump Sum Payments

If you know that you could be receiving a lump sum of money in the future, then using a lump sum home loan calculator can show you the exact effect your money can have. Not only can you reduce the amount you owe on your mortgage with your lump sum, but you’ll see just how much you’ll be saving in interest costs. You can also see how much time you’ve saved off your loan term.

Home Loan Comparison Calculators

Knowing how much you can borrow is a great start and understanding what your repayments will be is a good budgeting tool. The next step in your search for the right home loan is to consider using a home loan comparison calculator. Understanding the effect different bank fees and charges can have on your total mortgage costs can mean that the cheapest interest rate isn’t always the best mortgage when it comes to comparing them properly.

Early Repayments

Home loan calculators can be very handy tools if you want to know exactly what effect paying a few extra dollars off your mortgage will have. Most people discount the power of their spare change, but if you enter those extra amounts into a home loan calculator you’ll be able to see at a glance just how much you’re able to save in interest costs along with knowing how much time you’ve cut off the end of your mortgage period.

Borrowing Capacity

While you can use a home loan calculator to determine your maximum borrowing amount, you should always keep in mind that the computer doesn’t know your personal financial situation. The figure that you see on your computer screen after entering all your numbers into an online calculator is often a generic figure.

There are banks and lenders available that may offer substantially higher loan amounts than the calculator showed, just as there are other lenders that will offer much lower loan amounts.

In this instance a home loan calculator can offer you only a guide as to your borrowing capacity. This means different banks have different policies and lending criteria so what might look good on a home loan calculator may not be the right option for your situation.

It’s important you verify this figure and confirm the bank’s lending policies with a professional Choice Home Loans mortgage consultant.

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Andrea Kerr is one of our many Choice brokers that can help guide you through the mortgage maze.