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Mortgage calculation generally works in this way: A mortgage amount of $150,000 with an interest rate of 7% and a term of 30 years will have a monthly payment of $997. The total interest paid on this loan will be $209,263 and the monthly average of interest will be $581. If the interest on this loan seems to high but you do not qualify for another rate, shortening your term to 15 years can save you money on interest. If you change the term entered into the calculator to 15 years, keeping all of the other information the same, the total interest paid is reduced to 92,683, a difference of over $100,000.
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Buying a new home usually means taking on a new mortgage, both of which you will have to live with for the next five to thirty years. Making sure that the mortgage suits you just as well as your new home will help make those years more enjoyable. Looking into the possible terms of your new mortgage can only help. A good way to go about researching mortgage terms is to use a mortgage calculator. Mortgage calculation will help you choose the loan you want and ensure that you do not take on loan that you can not afford. Enter your information into our mortgage calculator to get an estimate on your monthly payments and fill out our free short form to contact up to four lenders about your new mortgage.
Small changes in interest rates or loan terms can make a large difference in your loan and the amount of money you pay by the time your loan is finished. For example, many mortgage calculators allow you the option of making an extra yearly payment. One extra payment yearly could possibly make a large impact on your loan. One extra yearly payment on a loan of $150,000 at 7% with a 30 year term can change the average monthly interest from $581 to $444 and the total interest paid over the life of the loan from $209,263 to $160,025, a difference of nearly $50,000. However, on the same loan with a 15 year term, the difference in total interest would only be $9,500. If you do plan to make an extra payment yearly, check with your lender to make sure that there are no prepayment fees if you pay off your loan before the expected date.
Though the figures given by a mortgage calculator are estimates, they can very useful in the planning of your mortgage. Use our mortgage calculator to plan your new mortgage or apply online to contact up four lenders.
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