Want to know how much you can afford to borrow? Need to work out how much your regular mortgage repayments will be? Want to know how much interest you will be paying on your home loan? Use a home loan calculator to work out the nitty gritty financial details before entering into a home loan.
Home loan repayments are the amounts of money a person agrees to pay their financial institution to repay a home loan. Every person’s home loan repayments will be different as it depends on the total loan amount, the interest rate charged and the loan term. The loan repayments are made frequently over the term of the loan. Some people may make additional payments to reduce the term of their loan and save on interest.
What will a home loan calculator take into consideration?
- Loan amount
- Interest rate
- Loan term
- Repayment increments
- Additional repayments
- Repayment types
- Mortgage type
What else should I consider before applying for a home loan?
- A safe practice is to make sure your loan repayments are no more than 30 percent of your income.
- Allow for a 2 percent interest rate increase when calculating how much you can afford to make in repayments.
- You have saved a deposit and can prove a savings history demonstrated over 3-6 months.
- You can provide financial documents, such as pay slips, bank statements, bills and rental receipts.
- You are informed of all associated fees, charges and ongoing costs.
- Make sure you don’t overlook extra costs such as, mortgage insurance and stamp duty.
- You’ve read and understand the product disclosure statement.
With the right amount of thorough research you can find your perfect home loan arrangement.