Mortgage Calculator

Written by Jeremy Horelick
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Many companies offer what are called mortgage calculators for their clients. This can be an especially useful tool when it comes time to juggle your finances and see just how much you can afford to spend. Remember, in addition to the pounds you're shelling out, you pay additional pounds for the right to spend them. Calculating the total cost to you factors in a number of different variables.

First among these is the amount you're seeking to borrow. Needless to say, the more you borrow over the long term, the costlier it will be. This assumes, of course, that the same term applies to differing amounts. In other words, if you borrow twice as much over the same 25 years as you were initially expecting, it will cost you twice as much to make that loan. But bigger amounts over shorter terms--say 15 years instead of 25--can end up saving you money in reduced interest costs.

Other Factors in Your Mortgage Calculator

So, in addition to the amount borrowed, the term of the loan plays a critical role. After that, your first and second incomes factor in as well, for these are an indication of your ability to repay your loan. But it's not that easy. You may make a million pounds a year, but if you have three vacation homes to pay off simultaneously, your mortgage lender will want to know this. Hence, your cumulative debt becomes a key factor as well.

Finally, the type of mortgage loan you're seeking can play a pivotal role. There are fixed rate mortgages, stepped discounts, buy to let rates, and many other packages available, including 100-percent mortgages. Each of these comes with varying terms, which can further affect the interest rate. It's worth checking the web site of your prospective broker to see if they offer a mortgage calculator. This can be a helpful aid when calculating how much money to borrow.

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