Mortgages come in different forms and sizes and are usually used as residential mortgages. As a homebuyer, you would normally pledge your home to the bank. It’s only when you cannot make your installments that your home could be foreclosed, the bank will have to evict you and put your house on the market to clear your dues. Now that you have understood the worst possible scenario of taking a mortgage, you might want to look at the factors that determine your mortgage payments.
Essentially, your mortgage comprises of the Principal and the Interest Payable. The combination of the two is known as the Total Payable or the total amount of the mortgage. In most mortgages, 70% of the initial payment is made towards paying off the Interest and the remaining 30% would be accounted for the Principal. As the years pass on, the principal reduces considerably and this would mean that the interest would reduce too. This method of mortgage payment is considered in as the Standard Mortgage, as most homebuyers would like to make larger payments towards their interest payment.
So what makes this Mortgage Calculator different?
If you are looking at moving into a home, you might want to look into the math behind your mortgage payments. You need to ensure that there is a strong equity on your home and similarly you should avoid paying high interest rates. Most interest rates differ from one lender to another. This makes it imperative to compare interest rates of more than two lenders. This is made easy with the Mortgage Calculator as you can pull up all the numbers behind your payments in seconds. This helps in saving you time from having to create those spreadsheets and leaves zero margin for error.
How does the Mortgage Calculator work?
This mortgage calculator by Home Warranty Reviews comes to life once you fill in the three fields — Loan Amount, Interest Rate and Loan Term. The entire loan amount contains the principal and the total amount of interest is referred to the Interest Payable. Finally, you should enter the Loan Term that is best suited for you and hit Enter or click anywhere on the screen.
Without a moment’s notice, the results will pop up which details the Interest Payable and total payable amount with its break up year on year. Don’t let the animated scale fool you! It helps provide a graphical representation of whether you are getting a good deal on your mortgage and if the interest is just right for you. A point to be noted is that each monthly payment comprises of both the principal and the interest. Every minor detail that relates to the interest rate, the breakups of the the payment and all the parameters are calculated and accounted for. All this information at the click of a button and with no added costs.
Features worth noticing
When it comes to the Mortgage Calculator, you have an animated see-saw, a pie-chart and a payment schedule which breaks up the total payment.
A first of its kind animated seesaw contains a home on one side and a piggy bank on the other. Based on the loan amount, interest rate and the loan term, the seesaw will tilt in your favour and help you understand if you are in a position to get the better of your mortgage. This can be presented in three scenarios:
- Option 1 — The scales tilt in a way that the home is lifted up and the piggy bank is on the lower side. This would mean that the mortgage is light your pockets and your savings are higher. This would mean that the interest payable is lower than the principal amount and that it is a good financial investment to help work towards building equity on your home.
- Option 2 — When the reverse of the scale occurs, wherein the piggy bank is up and the home is lowered then it means that your mortgage is expensive. This is further detailed when the background turns darker which means that this is not a good investment. This usually happens when the Interest Payable is more than the Principal amount.
- Option 3 — The seesaw is balanced. This explains that the amount that you would pay for your principal and interest is equal and that your savings is neither low or high.
This pie chart can be found just below the seesaw. It helps in explaining the monthly payment and how the total payment is divided into the principal (marked in red) and the interest (marked in blue).
The payment schedule contains a graph and table where you can decide on the month and year of the mortgage period. The entire term of the mortgage is represented in the graph detailing the period of the mortgage in terms of the amount in principal and interest as against the duration of the loan. The Balance curve will determine the percentage that you have paid as on the end of that year. The table consists of a comprehensive split of the entire payment. The columns are detailed as the year, principal payable, interest payable, total payable, balance and the percentage paid till date. Additionally, you can click on the year and review the month-wise breakup of payments due.
Need to Calculate Your Existing Mortgage? Here’s how
Enter the fields for Loan Amount, Interest Rate and Loan Term that are located just below the seesaw. Change the month and year of the payment schedule and you will notice that a detailed schedule labelling the percentage of mortgage paid and the balance amount that remains. This can be used as a mode of future reference when you are making your payments going forward. Try our new interactive mortgage calculator and keep your mortgages in check.
Let’s Hear From You
Give us your review on the Mortgage Calculator and let us know if there’s scope for improvement. If you have worked on something similar and would like to share a few pointers, then we’d love to hear from you. Anything from how the mortgage calculator has helped you, mentions of what you would like to consider in the product or feedback in general. We’re all ears!