Is every mortgage calculator the same?

There’s more to a home loan calculator than discovering your potential repayments. In fact, there are a multitude of mortgage calculators that may be useful for owner-occupiers and investors across different stages of the home ownership journey.

Let’s explore the home loan calculators that can help you fast track your way to your best home loan option and help you manage your budget before and during your mortgage term.

The top mortgage calculators available

• Borrowing Power Calculator

Before you begin your home loan journey or even begin to check out real estate options, you’ll want to determine how much money you may be eligible to borrow. Without knowing your borrowing power, it may be difficult to determine your property spending limit.

RateCity’s Borrowing Power Calculator mirrors the types of analysis a lender may perform when you apply for pre- or full- approval for a mortgage. This includes information on your income, your expenses and any dependents.

You will then be shown an estimated range that a lender may potentially allow you to borrow from low to high, as each lender’s eligibility criteria may differ.

• Mortgage Repayment Calculator

This is the calculator that typically comes to mind when you picture a mortgage calculator. A repayment calculator should help you to determine what different home loan option repayments may look like, based on the loan size and interest rate.

You will be shown your estimated mortgage repayments and be able to see what different repayment frequencies would look like as well. Not only could this help you when it comes to budgeting, but it may help to narrow down your short list of options by weeding out more expensive loans.

• Stamp duty calculator

Saving up a deposit is arguably the biggest upfront cost of purchasing a home but paying for stamp duty can be a close second. Stamp duty differs per state and territory and can climb into the tens of thousands of dollars range, depending on the property value.

Use RateCity’s calculator by entering whether you are an owner-occupier or investor, if you are a first home buyer, the state or territory where the property is based, whether it is a new or existing home and the value of the property. The calculator will then determine the estimated cost of stamp duty applicable.

Keep in mind that some stamp duty exemptions and concessions may be available in your state or territory if you are a first home buyer. Check your state Revenue Office’s website for more detailed information.

• Mortgage stress calculator

There’s more to a home loan than gaining approval, you’ll also want to ensure you can safely afford your repayments if – and when – interest rate hikes occur. One option homeowners can use to determine how risky the level of debt they have taken on based on their income is through RateCity’s Mortgage Stress Calculator.

Mortgage stress is colloquially described as when a household’s mortgage repayments exceed 30% of their pre-tax income.

• Stress free zone = Spending less than 20% of your income on home loan repayments.
• Stress danger zone = Spending between 20-30% of your income on home loan repayments. One or more cash rate hikes may put you in a financially vulnerable position.
• Mortgage stress zone = Spending more than 30% of your income on home loan repayments. You are already in “mortgage stress”.

The mortgage stress calculator page also offers insight and general advice on how borrowers may be able to help reduce the impact of mortgage stress or lessen their risk of facing it.

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