Home Loan Calculator

How the Mortgage Calculator works

Finding a home loan is one of the most stressful parts of the home buying process – but here at Your Mortgage, we try to make the task easy and convenient by providing you with the necessary tools that can help you find the right home loan and understand what you can afford to borrow.

Our Mortgage Calculator hosts several financial tools that will help you in the different aspects of home buying. If you are interested in knowing how much a home loan would cost you, you can give our Home Loan Calculator a try. If you wish to know how much loan you can take out based on your income and expenses, you can use our how much can I borrow? mortgage calculator to determine your borrowing power.

Using the Mortgage Calculator

In order for the calculators to work, you have to supply the relevant information. For instance, using our stamp duty calculator will require you to select the state you are in and the property type you are planning to acquire. You also have to indicate the property price. Following these steps will provide you the amount of tax you'll pay on any property purchase.

How do calculators determine monthly, fortnightly, and weekly mortgage repayments?

One of the most used mortgage calculators is our mortgage repayment calculator, which helps you determine how much you are going to shell out in a certain period of time to service your home loan.

For the tool to calculate how much your mortgage repayment will be, it needs to know the home loan's amount, interest rate, and term. You also have to indicate the frequency of your mortgage repayments: are you going to pay monthly, weekly, or fortnightly? Take note that this calculator assumes that you will be paying principal and interest.

Your mortgage repayment schedule is essential as it influences the total repayments you will make and the total interest your loan will accumulate. A monthly repayment schedule means you have to pay every specific day in a month. If you opt to pay fortnightly, it means you will have to settle your home loan repayment every 14 days or two weeks. You can also ask your lender if you can pay on a weekly basis.

Paying your loan weekly or fortnightly helps you pay off your mortgage sooner. A fortnightly repayment schedule allows you to squeeze in an equivalent of one extra month of payment — there are 26 fortnights a year, which is equivalent to 13 months.

So, assuming that you pay $3,000 monthly, this means that every fortnight, you pay $1,500. If you go with a monthly schedule, you would have paid $36,000 for the whole year. Changing your schedule to every fortnight, however, would let you pay $39,000 for the entire year.

Using the Mortgage Repayment Calculator, you will also find out that changing your repayment schedule reduces the amount of interest charged over the life your loan — albeit only slightly, especially if you do not reduce your loan term.

For instance, a $500,000 loan with an annual interest rate of 4.5% and a loan term of 30 years will require you to pay $2,533.43 monthly. Over the life of the loan, you will have paid $412,033.56 in interest. If you change your repayment schedule to fortnightly, still paying the exact same amount, the overall amount of interest you will have to pay drops to $411,599.13.

How much does interest rate affect your payments?

When you borrow money from your lender to finance your home, you will be paying back not just the amount you borrowed, but also the interest charges that come with it.

A huge chunk of your overall financial commitment do to with a loan actually comes from interest rate charges.

Interest rates are variable — they do not stay the same for a very long time unless you are on a fixed interest rate. However, even the fixed rate period expires; you can only expect to have the same interest for a maximum of five years.

A slight jump or dip in your home loan's interest rate could mean a huge relief of a massive disaster in your budget. Our home loan repayment calculator can show you how much even a small 0.25% change in interest rate could impact your repayments.

If you are taking out a $375,000 home loan with an interest rate of 4.5% and a loan period of 25 years, you will only have to pay $2,084.37 monthly. Increasing your interest rate to 4.75% will make your monthly repayments $2,137.94. The difference seems small, but if you use our Mortgage Repayment Calculator, you will discover that a 4.5% interest rate will only charge you $250,311.54 in interest, as opposed to $266,382.03 — that's more than $15,000 in savings.

Will making extra repayments help you finish your home loan sooner?

Wondering how much you can save when you make additional repayments towards your loan? Our extra & lump sum payment calculator can help. It calculates how much time you will shave off your mortgage term as well as the overall savings you would get.

Let's say you have a $450,000 home loan bearing a 5% interest rate, a 25-year mortgage term, and a monthly repayment frequency.

If you make extra repayments of $200 starting the fifth year or 60th month of your mortgage term, you will finish your home loan two years and three months early, allowing you to save as much as $26,100.

Assuming that instead of making extra repayments, you chose to pay a lump sum of $50,000 on the 60th month, three years and nine months will be shaved off from your home loan term and will let you save as much as $63,293.

Our calculators assume that interest rates remain the same over the life of the loan. It also presumes that you are paying for a principal-and-interest home loan.

How can mortgage brokers help?

Our Mortgage Calculators are designed to give you rough estimates of the information you are looking for, be it how much you can borrow or how long will your home loan period be.

While our calculators do not give you all the answers to your queries, it aims to help you assess your financial capacity and borrowing power before even applying for a home loan.

It is still a good idea for you to consult a financial expert to assess your situation thoroughly, which you can do for free here.

Mortgage brokers will be able to give you a deeper understanding of the results that you will be seeing from our Mortgage Calculators. They can provide you with advice and tips to make sure you grasp how home loans work.

Mortgage brokers can also assist you in getting the best home loan deals in town that perfectly fit your needs and capacities. Talk to a mortgage broker today and discover what you can afford!