Decide How To Structure Repayments With A Home Loan Repayment Calculator
Before taking out a home loan, it is helpful to use a Home Loan Repayment Calculator to help you determine your repayment commitment.
What Information Do You Need To Use A Home Loan Repayment Calculator?
To make the most of a home loan repayment calculator, you will need the following data to work out your repayment amount accurately.
- How much do you want to borrow?
- Your preferred loan type (e.g. floating or fixed for 1 to 5 years)
- Loan term (the number of years to repay the loan)
- Interest rate (this will be linked to the loan type you have selected)
- Repayment frequency (e.g. weekly, fortnightly or monthly)
- Repayment type (principal and interest, or interest only)
Once you have inputted all of this data, the calculator will generate the following information for you:
- The minimum required regular repayment.
- The total amount of interest payable over the selected period at the default interest rate.
How Do The Various Inputs Affect The Repayments?
Now that you have inserted your basic information, you can manipulate the different values to see how the total amount of interest is affected. For example, try the following:
- Increasing or decreasing the default interest rate
- Switching between floating and fixed-term options
- Changing the repayment frequency - you can save on the total amount of interest by increasing the payment frequency
- Adjusting the loan term
How Does Paying More Than The Minimum Affect The Total Repayment Amount?
Now you can investigate the effect of paying more than the minimum required payment. For example, if you can afford to pay 50 dollars more per month than the minimum required amount, you can add this value. The home loan repayment calculator will show you the revised repayment and, more importantly, how much interest can be saved and the total term of the loan reduced.If you receive an annual bonus, you can allocate a portion of this to your home loan repayment, and the calculator will once again show how much interest can be saved and the term reduced.Total Mortgage’s Home Loan Repayment Calculator can help you quickly determine your repayments on your required home loan amount. This can give you a good idea of your monthly commitment. It also provides the flexibility to adjust the values and add in a lump sum or additional monthly amount to see how you can save on interest and reduce the term of your loan.