A mortgage calculator can help consumers see the effect
different interest rates will have on their monthly
payments and the total amount they will need to borrow.
Online search engines are a good way to locate a mortgage
calculator to use for this purpose.
The mortgage calculator uses certain data to calculate
your monthly payment. A simple mortgage calculator only
requires that you provide the amount of the loan and
the interest rate, as well as, the length of the loan
So, for example, if you want to take out a 30-year
loan to purchase a house that costs $100,000. You have
$10,000 to put towards the down payment. Using a mortgage
calculator, you could determine that at an interest
rate of 8 percent your monthly payment (without expenses
such as taxes and insurance) would be around $660.39
a month. You could compare that with result with an
interest rate of 7.5 percent to see that getting a rate
this is even half a per cent lower would mean a savings
of about $50 per month – a savings of thousands
of dollars over the life of the loan.
Consumers who are new to the home buying process may
not realize that shopping for the most favorable interest
rate is worth the extra time and effort. Entering the
relative data into an online mortgage calculator can
makes it obvious that underestimating the long term
ramifications of not getting the best deal on your rate
can be a big mistake.
Mortgage calculators help consumers to have a better
understanding of how the interest rate of their loan
affects their monthly payment and impact how much they
can afford to spend on a home.