For most people, buying a home will be the most expensive purchase in their life, with ongoing monthly payments for a typical period of 25 or more years. The average house price in the UK is around £270,000 and when taking out a mortgage loan of this size, even a small variance in interest rates will make a significant difference.
Using a mortgage calculator helps homebuyers to get a better understanding of how decisions such as loan-term length and the loan amount will impact their total loan repayment amount. A mortgage calculator will also highlight the financial difference between mortgage deals with varying interest rates and fees.
What is a mortgage calculator?
A mortgage affordability calculator is an online tool that homebuyers can use to determine how much they will pay for a mortgage over time. It provides you with a financial overview of your monthly mortgage payments and the total cost of the mortgage. When searching for a property, using a calculator will help you to determine what price range of property will be affordable.
Key figures to input for accurate results
When using an online mortgage calculator, you simply input the following data:
- Property price
- Loan amount
- Deposit amount
- Interest rate
- Length of mortgage term
- Mortgage type
- Whether you are buying alone or with a partner
Once this data has been added, the calculator will produce the overall cost of the mortgage, the monthly payment amounts and the total interest over the mortgage term.
