Before you apply for a mortgage, it is important to understand the commitment that you are making.
Mortgages are debts. These debts can last for decades. Having a clear appreciation of what that debt involves can help you to make the right decisions.

The amount you can borrow will be dependent upon a number of factors such as your age, income, expenditures and even your health.


Why mortgage calculators are great

When you borrow money to cover the cost of your house, you are entering a secured debt agreement. This means that you could lose your property, if you can’t keep up with the repayments. By putting the details of a mortgage into an online mortgage calculator, you’ll gather important figures to help with your monthly money management.

Two of the most important details are the amount that you will need to pay each month, and the amount that you will pay overall. With this information, you can check that you will be able to afford your monthly repayments.

Consider that you are unlikely to be in the same job until the end of your mortgage term. If your income dropped, could you still afford your mortgage? Knowing how much you will pay overall will help you to visualise your debt realistically.

That lovely £150,000 house could cost upwards of £220,000, with interest included in calculations. You don’t want to enter such a big financial agreement without thorough preparation. That’s where mortgage calculators come in.

Types of mortgage calculator

You’d be forgiven for thinking that all mortgage calculators are the same. In fact, there are many different types. You may need to use multiple calculators, to build up a picture.

A basic mortgage calculator will usually tell you what your monthly repayments will be. It will also provide details about how much you will pay overall.

On an interest-only mortgage, your repayments will not bring your debt level down.

On a repayment mortgage, your monthly expenses will be higher and your mortgage debt will reduce with each payment.

A mortgage calculator may show you how your debt level will reduce. You may be able to see how much debt will remain each year.

Other mortgage calculators will provide a wider range of facts, statistics and figures. You may be able to check:

  • How much you may be able to borrow, before applying for the mortgage
  • If a one-off or recurring overpayment will affect your mortgage
  • How an interest rate change could affect your monthly repayments

It is helpful to experiment with different mortgage calculators, gathering all the important details before you make an application. Some calculators are better suited to existing mortgage holders. You can use these to see how any changes will affect your situation.

How a mortgage calculator works

Mortgage calculators exist to simplify the sums that you would otherwise have to do manually. To use a calculator, you should already have some details to hand. Typically you will start by providing the overall property price, the mortgage value, the term length and the interest rate. If you haven’t yet started the mortgage application process, it can help to experiment with a variety of realistic figures.

Begin by using an affordability calculator. This will tell you what size mortgage you are likely to be approved for. The estimate will be based on your salary or monthly take-home pay. You can use this estimate as your mortgage value, when adding details to any other calculators.

Add your deposit amount to create an estimated overall property value. If you have £20,000 saved up, and you are likely to be approved for a £150,000 mortgage, then you should assume that you will buy a property worth £170,000. Remember that you do not have to borrow the maximum amount – a smaller mortgage is fine, and will be less of risk and commitment.

Most banks have mortgage rates listed on their website, so that you can find an accurate interest rate to use for your calculations. A calculator will take the information that you have provided, then use it to work out how much you should be paying each month. In most cases, you will be able to see estimated monthly repayments for both repayment and interest only mortgages.

Which mortgage calculator to use

Most basic mortgage calculators are identical. They will be using the same information to run the same calculations. If you know which bank you hope to use, then it is usually best to start with their own mortgage calculators. These will provide the specific interest rates that you can expect to pay.

For advanced features, you might like to visit websites that are independent of the mortgage providers. The MoneySavingExpert mortgage calculator will automatically present details of how much debt you can expect to have remaining through each year of your repayment term.

Mortgage calculators are not 100% accurate

Mortgage calculators use estimates, current rates and generalised calculations. The figures that you see are a rough guide.

When you apply for a mortgage, you might be offered a different maximum loan amount than the one that the calculator predicted. Interest rates may also be different, affecting monthly and overall repayment figures.

Do not rely on a mortgage calculator to be entirely accurate. They are useful tools, but should not be a replacement for detailed research into the mortgage that you are offered.

Mortgage calculators available today:



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