Using an online mortgage loan calculator can help you quickly and accurately predict your monthly mortgage payment with just a few pieces of information. It can also show you the total amount of interest you”ll pay over the life of your mortgage.
What is Mortgage Loan?
A mortgage is a loan that you get from a bank. You use the money to buy a house or any other property. You pay back the loan in two ways – by making regular payments, and by putting down some of your own money as an investment. If you take out a mortgage, the bank will usually hold onto your mortgage for 30 years. This is called amortization and it allows you to spread the costs of repaying your mortgage over time.
Mortgage Loan Calculator
A mortgage Loan can calculate a number of unknown values including affordable home price, monthly loan payment, or percentage of cost available as a down payment. It can create a detailed amortization schedule with date-based payments and charts. The calculator optionally supports points, private mortgage insurance (PMI), property taxes, and hazard insurance. You can Also Use the Retirement Age Calculator To calculate Your total Savings at the Retirement Age.
Features of Mortgage Loan Calculator
– It helps you calculate the monthly payment.
– It shows you how much interest you will pay over the life of your loan.
– It shows how much money you can save by paying off your mortgage early.
– It can help you figure out how much house you can afford.
– It can also help you figure out how much money it will take to pay off your mortgage in a certain amount of time.
Calculate mortgage loan
If you want to buy a property, you usually need a mortgage. The same applies to building a home. The so-called mortgage loan is an attractive financing option in this respect. The property or land is pledged as security for the loan.
Thanks to the security, mortgage loans usually come with favorable conditions for the builder or real estate buyer. In addition, such a loan can be invested in the long term. Mortgage loans are usually designed as annuity loans, the repayment rates are consistently high.
Mortgage loan – Secure the loan with a mortgage
A mortgage loan is a special loan that is usually secured against possible insolvency with a lien on a property. This means that in the event of the borrower’s insolvency, the bank has the option of selling the financed property and thus paying off the outstanding debt. The borrower assigns the rights to the property to the bank. Due to this additional security for the lender, the terms of such a loan are usually more attractive than those of an unsecured loan.
The interest rate for construction financing is influenced by factors such as construction interest rate, income, professional group, fixed interest rate, and repayment amount. Loans secured by mortgages are characterized by high loan amounts, long terms and earmarking.
With special repayments, the loan can be partially repaid early, so that you can save on interest and financing costs. The construction financing can also be completed more quickly by changing the repayment upwards. You should therefore think carefully in advance whether these options are important to you when it comes to a loan.
Mortgage calculator: Get an initial overview of your mortgage lending
With a mortgage calculator, you can get a good overview of the framework conditions for a building loan. You can easily calculate and plan the financial requirements and the financial burdens associated with a mortgage. With this information, you can then discuss specific details with your construction financing partner. In most cases, it will be an annuity loan, characterized by a fixed interest rate for a set period of time.
Mortgage Rate Calculator: How Much Mortgage Can I Afford?
When it comes to the question “How much mortgage can I afford?”, the interest to be paid plays a major role. Because their amount has a significant impact on the total cost of the home loan. With our quick interest rate calculator for mortgage interest, you can query the current interest rates of the banks with just five entries.
A mortgage loan calculator provides these results:
- the monthly expenses for a home loan
- about the remaining debt
- as well as a complete overview of all payments during the entire financing period.
Mortgage Calculators contain a few terms that you need to know when comparing mortgages when calculating interest and principal. We explain the ten most important terms briefly and concisely.
Effective interest rate: The effective interest rate or annual percentage rate includes additional costs such as bank fees and a forecast by the bank about future interest rate developments.
Equity: Equity is the assets that you contribute to the financing, in other words, a downpayment. This can be cash, a home savings contract, life insurance, or gifts from relatives. Ideally, there is an equity share of 20 to 30%. Financing a home without equity is possible in some cases if you have a very good credit rating, but it is more expensive than building or buying a house with equity.
Term: The term of a loan indicates how long it will take for you to repay the loan. The term has a direct impact on the amount of the monthly installments and the costs. A relatively long-term loan means lower monthly rates but higher total costs.
Payment in installments: You do not pay back the loan taken off in one piece, but in small parts, in installments. This installment payment can be made monthly or quarterly.
Remaining debt: The remaining debt is the amount that remains after the debit interest rate has expired. Either take out follow-up financing from the previous lender or look for another bank to pay off the remaining debt with a new loan.
Debit interest: The debit interest (formerly also called nominal interest) indicates the amount of interest on the loan that you actually have to pay. However, this interest does not contain any information on the number of additional costs such as commitment commissions or fees. These are included in the effective interest rate. Therefore, the effective interest rate is usually higher than the borrowing rate.
Debit interest rate commitment: The debit interest rate commitment describes the period in which you repay your home loan at a fixed interest rate. The bank is bound to the contractually agreed rate of interest. If there is still a residual debt after the end of the fixed interest period, a new interest rate is set.
Special repayments: Special repayments are unscheduled repayments of a loan or part of it. The advantage: you are debt-free faster. If the special repayment is not included in the construction financing contract as a free option, you will have to pay a penalty fee.
Repayment: Your monthly loan installment consists of an interest portion and a repayment portion. With the repayment portion, you pay back the loan amount. A higher amortization means faster repayment of the loan. The repayment must be at least 1% of the loan amount, 2% or even 3% is better.
Repayment plan: The repayment plan shows you how much you have already paid and how much the remaining debt is for each point in the loan term.
Budget calculator: How high can the mortgage be?
That depends on the budget you have available. You can only answer the question of how much house you can afford by looking at your income (e.g. salary, pensions, child support allowance), your regular expenses, and the equity you have. A budget calculator will help you organize these factors and draw up a financing plan.
Mortgage loan terms compared
In principle, the same applies to the conditions as to the conditions of other loans: the lower the risk for the lender, the lower the interest rates. However, the risk assessment for a mortgage loan is based on different criteria than is the case for a consumer loan with a shorter term.
First of all, the risk depends a lot on the available equity. Anyone who has a relatively large amount of equity and therefore does not have to borrow more than 60% of the market value of the property can count on very favorable conditions.
Lending up to 80 percent of the property value is usually possible, sometimes even 90 percent. However, this has a negative effect on the loan conditions. The lowest interest rates are at 60 percent loan-to-value. With a mortgage loan calculator, you can compare this in a flash, allowing you to compare the resulting mortgage interest rates.
The question of the creditworthiness of a borrower
The creditworthiness/credit score of the lender also plays an important role in determining the interest rate. Here, too, the long term of a mortgage loan means that other criteria are used to determine creditworthiness.
Long-term security, such as that offered by employment as a civil servant or employee with many years of service, is weighted more heavily than with short-term loans.
The current interest rate level
A brief note on the general level of interest rates for mortgage loans: If the borrower’s creditworthiness/credit score is carefully checked, mortgage loans are a relatively safe investment from the lender’s point of view. Especially in times of crisis, banks often use mortgage loans as a way to safely park their capital.
As a result of the sovereign debt crisis in Greece and other European countries, mortgage loans with a good credit rating are sometimes granted on terms that offer the bank little more than compensation for costs and inflation. The main reason for this is that a mortgage loan is now classified as safer than some government bonds from a bank’s point of view, which is why more funds are available for it.
Pay attention to the additional costs of the mortgage loan!
The annual percentage rate already includes most of the incidental credit costs, but not all. Some banks charge fees for determining the value of the property. Incidentally, this applies to loans in general: if any collateral is deposited, the costs of determining the value of the collateral are not included in the annual percentage rate of charge.
In addition, provision costs may be incurred for the time between the loan commitment and the loan disbursement. In the case of new buildings, in particular, this period of time can be quite long.
What else should you think about when it comes to a mortgage loan?
Below are a few key points to help you as you consider taking out a mortgage loan.
Sale despite land charge
Real estate financing is a long-term decision that can only be reversed later with great effort and usually with financial losses. The fundamental difficulty is that the lien granted to the lender makes it significantly more difficult to sell the property if the personal income situation changes.
Am I trapped in a contract with long fixed interest rates?
No, you are not. Even if no bank mentions this of its own accord, you also have a regular right of termination in the case of long-term fixed interest rates in accordance with the law and can terminate the contract after a number of years with a notice period. Even a prepayment penalty is then not due.
What is a prepayment penalty?
You conclude a contract with the bank for long-term financing. The bank earns on the interest, which is actually nothing more than a fee for lending the money. The bank calculates this income. These internal calculations have far-reaching consequences and affect many internal bank processes.
If you want to terminate the loan agreement early, the bank will lose money that they had counted on. This loss can be paid for by the prepayment penalty.
What happens at the end of the fixed interest period?
It should also be noted that at the end of the fixed interest period, follow-up financing is usually required at the then-applicable interest rates. Some savings should be included in your calculation here.