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What is a home loan calculator?

  • Keerati

A home loan calculator is an automated, usually online, tool that enables the user to quickly determine the financial implications of changes in one or more of their mortgage variables in their home loan financial agreement as well as being useful to compare the costs between different home loans, or mortgages from different lenders. The major variables that could change during the term of the home loan are the balance of the loan, interest rates, number of payments per year, the total number of payments and the regular payment amount. With the current uncertainty in the housing market it is crucial that anybody considering taking out a home loan ensures that they calculate the repayment amount properly and borrows accordingly.

You can find a home loan calculator on a number of websites,and usually lenders will have their own calculator on their website which is available to use free of charge and with no obligation. These tools will enable you to very quickly work out what the monthly repayments will be on a specific amount over a specific time period and at a specific interest rate, helping you to decide whether this is affordable or not and thus determining the loan amount that you can stretch to.

All of the big banks have their own home loan calculators:try HSBC home loan calculator tool for example, or the BBC version on the Homes section of their website. You could also try a price comparison website such as moneysupermarket which has an area that gives general information.It is also worth speaking to an expert in home loans for advice as to whether there are any other hidden costs that could impact on repayment amounts. For this reason we also recommend consulting an independent financial advisor who specialises in home loans. Try JRS Financial Services who can give you sterling advice on a home loan product to suit your individual needs.

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