Mortgage Repayment Calculators

Written by Beth Hrusch
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Calculators are tools that any prospective mortgager can use to figure out the monthly payment on a loan. There are, in fact, a number of different calculators that help determine everything from how much one can afford to borrow to how extra principal payments can shorten the term of a loan. A calculator can give the borrower a good idea of what he or she can afford even before a loan officer gets involved.

Repayment Calculators and How They Work

A simple formula for figuring a monthly payment uses the mortgage amount, term and interest rate. The interest rate used is the stated rate of the mortgage, not the annual percentage rate, which takes into account such things as mortgage insurance, points and loan fees. Also, the payment given using a simple payment calculator will not include the portion of the payment that is allotted for real estate taxes and insurance. This amount is put into escrow and paid out by the lender when due.

A payment calculator is also a quick and easy way to see how much faster a loan can be paid off by making extra payments on a one-time or regular basis. Other calculators can tell a borrower how long it will take to realize savings on a refinance or how much money is saved in taxes by taking out a home loan. The advantage to using calculators is in the fact that they give good approximations of actual costs, thus giving the borrower a realistic financial picture even before taking out the loan.

Mortgage repayment calculators can be found online. Anyone who knows how much he or she needs to borrow can plug in the necessary figures to determine what the monthly payment will be. This is also a good way to see what kind of interest rate will keep the payment down to a manageable amount. When shopping for lenders, it is a good idea to keep this figure in mind.


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