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Monthly mortgage calculator – Information about Monthly mortgage calculators


When people get ready to take on a house or business loan, one very important tool is a monthly mortgage calculator.  If your broker has advised you to take on a fixed mortgage rate, this tool may not be as necessary. If you have a variable rate that can change each month based on Canadian market conditions, you definitely need access to one or know that your broker is properly using one. Using a mortgage qualification calculator can help you make one of the most important financial decisions you’ll ever make.  Generally, a calculator will determine a payment each month according to information you offer. The devices takes into account the income required to maintain home mortgage payments as well.

Calculators don’t need to be complicated. They do need accurate information supplied by you to come up with the appropriate answers. Finance charges can also be figured into calculations. There are a variety of things your monthly mortgage calculator can assist you with. For instance, if you’d like to know how your payments might look twenty years from now, a tool like this can offer you a glimpse into the future. While it’s true the numbers given can change, you’ll still get a generally good idea of where your payments will stand. Tools like a mortgage calculator can give you peace of mind because you can see the numbers for yourself if you want as you input them, rather than just seeing figures handed to you on a piece of paper. The mortgage process can make more sense when you understand why certain information figures into calculations.

A monthly mortgage calculator will help you get an idea of what you could save by increasing your payments, or making payments toward the principle loan amount. Perhaps you want to save for an ocean-worthy, luxury boat. Maybe you’ve just had a baby and want to see how much money you could save toward your baby’s college education. You might also decide that making larger payment sooner always you to save more money for your own retirement, medical expenses, or extended world travel.  Whatever the reason you are interested in, making more frequent or larger payments can positively influence your real balance and interest. Your broker or financial advisor should be able to guide you with assurance and help you with calculations.

Another way a mortgage calculator is helpful is if you want to see specifically how your payments can be reduced or the interest you pay becomes smaller with each payment you make. It’s interesting to see how much a variable payment affects your loan over time. You’ll need basic information for the calculation like the original loan amount, what your current interest rate is, the length of the loan term, as well as any applicable fees and stamp duties.  You can do your own calculations or have your broker do them. It’s also very convenient and easy to have your calculations forwarded to you or your partner via email. This way, you have another set of eyes to review and consider your monthly investment and you can discuss options with each other.

Some people like to know how much they are shaving off their mortgage for every one thousand dollars they put toward it. That’s easy to figure out with a monthly mortgage calculator. Here’s an example. Assume that you take out a $250,000 loan for 30 years with a 5 percent interest rate. Those factors mean your loan payments would total $484,339.46. Therefore, you are paying $5.38 monthly per thousand dollars you borrow adding up to a yearly $64.58 finance charge. So your loan would cost you $1,937.36 per thousand dollars borrowed over its lifetime.

A monthly mortgage calculator is useful to figure out just what interest alone will cost you on a loan. Knowing these amounts can allow you to decide with your broker whether additional payments along with those interest payments would be to your overall, long-term loan benefit. Another frequent use of the loan calculator is to figure out which offer is better. You can look at side-by-side comparisons and see exactly where each would be an advantage or disadvantage to you. Be sure and ask your broker to explain the calculations you are looking at and what they really mean in terms of what you need to be able to pay each month toward your mortgage. Don’t be shy about asking questions. No financial question is a dumb one. Very few people can afford or want to take a chance on a less than advantageous deal, so just ask whatever you need answers to.

If you don’t know the difference or advantages of doing a standard or bi-weekly payment agreement, ask your broker or financial service representative to explain the process to you. You can calculate whether or not these types of payments will decrease the length of your loan term. You can then decide which type of payment process works better for you and your income. With a typically standard loan payment plan, you can assume it will take you about 30 years to pay off your mortgage. With a bi-weekly or fortnightly plan, your mortgage loan payments will end after 25 years and only 3 months. So you would benefit by saving payments on nearly five years. Chances are, your interest rate on payments will be lower with the fortnightly payment option. Be sure to discuss your ability to maintain either standard or fortnightly payments with your financial advisor.

Another great reason to use a mortgage calculator is the ability to determine whether you want to rent or buy a home based on loan and rate terms. When you can see the real numbers right in front of you, it really helps you make a sound financial decision that will work for you. You’ll need to take into account what the current rent might be and what an average, yearly rent increase could be. Maintenance, appreciation, and selling costs and fees all play into this type of calculation. Be sure to keep in mind the Canadian tax benefits you may be eligible for with the purchase of your home.

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