UK Mortgage

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UK Mortgage Calculator 

When borrowing money to help finance a home purchase deal, you may opt for a mortgage because it tends to offer lower interest rates and it may extend over a long period allowing you ease the burden for paying for the loan. However, as much as a mortgage may seem attractive, you also want to know that it is just part of many other expenses you may be living with. The cost implication of a mortgage is not something many people understand and that is one reason why people find themselves in financial difficulties once they have taken a mortgage. There is every reason for you to make a sound financial decision when borrowing a mortgage in UK and one tool that you may find very resourceful is a UK mortgage calculator.

A mortgage calculator is not just a tool for providing you with values and numbers, it is a something more than that. It helps in many different ways including estimating the amount you may be approved for a mortgage, the suitable loan amortization period, and the best interest rates in the market. It can help you in coming up with a budget that allows you to repay your mortgage with ease.

 Why You Need a Mortgage Calculator

There are obvious reasons for using a mortgage calculator one being that it allows you to easily determine the amount of mortgage you should borrow and the interest rates applicable. It also helps you compare the different mortgage deals available in the market because different lending institutions will offer different rates and charges.  When you use the loan calculator, you are in a position to know which mortgage works for you and which lending institution you should work with. A mortgage comparison can give you the best deals meaning you get the best rates.

Many a times, people only see the mortgage amount as directly correlating to the price of the home they want to purchase, but there are costs you should be wary of. When taking a mortgage, you want to evaluate all the risks involved including the costs and expenses that may not directly be pointed out when borrowing. A mortgage will come with other related costs and charges or fees. It is also just one of the expenses that you will be meeting because you have to live your daily life that means you have other financial obligations to meet. You could also be having another loan for example, a home improvement loan or a car loan that you are paying. All these are costs that you need to consider carefully and a mortgage repayment calculator is going to assist you come up with an appropriate budget so that you don’t struggle to repay the amount. 

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Mortgage Costs

A mortgage comes with other costs and the obvious one is the interest rate you pay against the principal amount. Apart from the interest amount, there are other raft of fees, taxes, and charges that you may have to pay before and after you get the home loan. You need to factor in all these mortgage costs when buying a home so that you don’t find yourself in an awkward position.

Before you take the mortgage, there are fees that you pay to the lender and you will find that most mortgage products in UK have at least one fee if not two or three. The mortgage arrangement fee and the mortgage booking fees are two typical fees that you will pay to the lender. The arrangement fee use to cover the lender’s administration costs, but now, it has become a crucial part of the cost of mortgage besides the mortgage rates. Sometimes, the arrangement fees may be termed as the product fees or the application fees or the booking fees.    

When you use a mortgage calculator UK tool, and you want to budget for the repayment of the loan, see that you consider the various mortgage costs.

As the homeowner taking a mortgage, you should be wary of lenders that offer you low rates to disguise their high fees. You may find some lenders charging fees as high as £2,000 or more, but when it comes to the rates, they look so attractive. What they do is that they have cunningly tried to lure you with the low interest rates, but they trap you with the high charge fees that you may not be aware of. Depending on the size of the loan you want, sometimes, you may find that a high fee- low rate deal is more attractive and cost efficient than a low fee – high rate deal. Higher fees may be seen to work better for larger loans.

Also, be careful because a lender will provide you with options of paying the product fee or arrangement fees. It may be upfront, where you pay at the time you are getting the loan or you may add it to the mortgage. If you add that amount to the mortgage, it will be charged interest and it may create more burden to you in the long run. There is also the disadvantage of paying upfront because you may lose the arrangement fee you pay if something goes wrong with the home purchase deal. The trick here is that you should add the arrangement fee to the mortgage loan, then immediately the home purchase deal matures, you pay off that fee immediately so that it’s not charged interest together with the loan. Even when you use the mortgage calculators, it may be important to seek the help of a mortgage advisor to give an insight on the various fees and charges that may be imposed on your loan because some may not be disclosed to you at the time of applying for the loan.

When you add the fees onto the mortgage, it is going to protect you from losing some or part of the fee you pay upfront if the mortgage does not materialize or go through for any reason. Sometimes, lenders may prevent you from adding the fee to the mortgage and paying it immediately after the mortgage deal goes through, so there is also another trick you can use which is overpaying the mortgage. Many mortgage lenders will allow borrowers to make over payments of up to 10% without imposing overpayment penalties. That should be fine with you if the other option does not work out.

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Lenders may also charge what they call booking fees to help secure a fixed-rate, discount deal, or tracker. This may amount to about  £100 to £200.

Apart from the mortgage fees, there is also the stamp duty that is paid to the government. It is a form of tax that property buyers pay to the government when they buy property. Stamp duty may not be levied on properties that are of £125,000 or less, so you want to think about that and know when it applies because it is going to have an effect on the cost of your mortgage. Do all your mortgage cost properly and take advantage of the loan repayment calculator to help you make a wise decision. You should also know that the mortgage calculator you use may not factor in some of the cost of the loan, so you to do your research well.

Other costs involved are such as conveyancing fees, land registry fees, relocation expenses, services charges, and upkeep.

 How to Use a Mortgage Calculator

A loan repayment calculator will help you in different ways whether you are borrowing a mortgage or you already have one. If you want to know the amount you will pay every month, you will enter the amount of loan you want to borrow and the interest rate. In case you already have a loan, and you probably want to know how a rise in interest rate is going to affect your payments, you can use the calculator. A mortgage affordability calculator will require you to provide information such as the your income details including salary, pension, and bonuses; information of payments you make on other loans such as personal loans and credit card payments; other outgoing that you have such as council tax, maintenance costs, monthly travel, and insurance.  Depending on what you want to compute, these is usually data that you have to feed in to the loan calculator and it will give you the results in just a few minutes.

If you want to know the monthly payments, total payment, and the total interest paid, you may enter data like the mortgage amount, the mortgage term in years, and the interest rate in a mortgage calculator like that provided by nationwide mortgage. 

Buy-to-Let Mortgages

When you talk of buy-to-let (BTL) mortgage, it’s a form of mortgage that applies to property buyers buying to rent the property. While the rules for applying for the loan as similar to those for the normal mortgages, there are some different. You will find that with the BTLs, they tend to attract higher interest rates. When seeking to get a BTL mortgage, you want to use a loan calculator to determine how much to borrow depending on your financial situations. You may get a BTL mortgage if you want to invest in flats or houses and you can afford taking the risk of investing in property.

With buy to let mortgage, it’s mostly interest only meaning that you are not paying anything each month, however, at the end of the loan term, you will repay the principal or capital in full. The fees for applying for these mortgages are much higher and there is age limit for the mortgage. If you are taking buy-to-let mortgage, you should plan for times during which there may be no rent that is coming in. So don’t assume that there will be tenants occupying the property all the time, and at times, the tenants may not pay the rent as agreed. So, make sure you plan for these eventualities. Also, don’t rely on selling that property to repay the loan. If you fall into this trap, it is going to hurt you. The prices of the houses may fall and this means you may not get sufficient amount of money to repay the loan. In case the prices are down, you may have to make up for the different on the mortgage balance.

Investors may houses to let may want to consider other costs like tax. If you purchase a house to let for profit, you are required to pay what is known as the Capital Gains Tax, especially if you exceed the threshold provided. A rent income which is more than your mortgage interest payment or some allowable expenses may be levied Income Tax. A buy to let mortgage calculator can help when you want to find the amount you can borrow and how the loan is going to cost you.

Calculating Mortgage UK Manually

The easiest way to calculate a mortgage is by using the calculator, however, if you want to do it manually, you may use this formula:

M=P*r(1+r)n/(1+r)n-1

In this formula, “M” stands for monthly repayments and “P” denotes the principal amount. The “r” stands for the interest rate and the “n” represents the term of the loan or the period in which you are repaying the loan.

Remortgaging or Refinancing your Mortgage 

Remortgaging helps you reduce the cost of paying for your loan. It allows to get a loan with a lower interest rate thereby ensuring you comfortably pay for your mortgage. You can find out the most suitable mortgaging deal by using a remortgage calculator. A remortgaging calculator helps you find out if you will be saving money by switching to a lower interest rate mortgage. Borrowers need to realize that if they consolidate their short term debts into a remortgage, they may increase their interest rates if they are repaying for a longer term. A remortgage is a situation where a homeowner takes out a new mortgage against their property to replace the current mortgage they are paying with a better term loan or to borrow against the property. It is estimated that about a third of home loans in UK are in form of remortgages.

A remortgage is suitable for you if the current mortgage deal is just about to end. You will find that most mortgages will last a short time, let’s say two to five years – which is the typical length of loan repayment offered to tracker, discount, or fixed rate mortgage. After that period, you are put on the standard variable rate (SVR) and in some cases, the SVR may be higher than what you have been paying. A remortgage can allow you to switch to a better loan rate. You can also consider a remortgage if the value of the home has gone up or if you are worried that interest rates may go up. If you want to switch from the interest only to the repayment form of mortgage, you may as well think of remortgaging. So if you want to offset mortgage, there are many ways to do it including remortgaging for a cheaper interest rate loan.

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Canadian Mortgage

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Canadian Mortgage Calculator 

Some people have sufficient amounts of money to purchase houses without needing to take a mortgage, but for others, they will rely on mortgage to finance the house buying deals. A mortgage is a loan that is taken to help buy a home. Individuals taking out mortgages will make down payments and the remaining balance of the loan is paid through monthly installments. The length of paying for mortgage also known as the amortization period can vary depending on the kind of loan you are taking but most have an amortization schedule of about 25 years. To calculate the amount of mortgage you should take, the home buyer may need to use a mortgage calculator.

A Canadian mortgage calculator helps you to find out the monthly mortgage repayments you will be making. The mortgage calculator also helps you know the total payment and the interest you will pay. This way, you can make an informed decision on whether you are financially fit to be able to repay the mortgage or not. A mortgage calculator uses a program that works out the figures or values you want to know about regarding the loan. For example, you may enter the mortgage amount, the mortgage term in terms of years, and the interest rate expressed in percentage form. The mortgage affordability calculator will then give you the monthly repayment, the total amount to pay in that loan term, and the total interest paid.

What is a Mortgage Calculator?

So, a mortgage calculator is actually a tool that applies a mathematical mortgage monthly payment formula to help in mortgage computations. It is a useful tool for checking different values that are involved in mortgaging. In addition to knowing the values, you are also able to find out if you can qualify for a mortgage loan or not. So, if you are looking for a mortgage loan in Canada, you will find it very useful to apply the Canadian mortgage calculator.

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 Why Use a Mortgage Calculator in Canada

 You can use a mortgage calculator Canada tool for many reasons and one is that you can get a loan that attracts the lowest interest rate. Because the calculator will show you the loan interest rate you will be paying and the interest amount, you are able to know if that is the kind of loan you want or not. You also learn what the effects of the loan will be to you and this should be your most important thing. Calculating the mortgage amount you will take is very important so that you don’t find yourself in financial troubles or worse still a foreclosure situation.

That said, a Canadian mortgage calculator will help you in the following ways:

Obtaining a Pre-approval

You may think that getting a mortgage is easy, however, if you don’t know how it is going to affect you, it could turn out a big burden on your finances. Individual homebuyers often are not the only people having a say regarding the mortgage they should take, lending institutions also have their voice. The lenders can dictate the amount you will get. The lending institutions may determine what homebuyers should take as a mortgage loan. A mortgage calculator Canada is a very essential tool when you want to determine what you should be willing to apply as a loan to buy a home. If you use the calculator, you can find out the amount you can get and then make your loan application for approval. The pre-approval knowledge you have helps you make the right application so that you are not denied the loan. The loan calculator allows you to evaluate your pre-approval process by knowing how much of a mortgage you may be able to get approved for.

 Calculate other Expenses Related to the Mortgage

Many people will just look at the amount of mortgage that they may be approved and then start thinking of the properties that are the top of the budget. It’s important that homebuyers taking mortgage loans to consider other expenses related to the mortgage. For example, you are paying interest on the loan. Since a mortgage involves a big sum of money, many people will have a significant amount going to service the interest of the loan. Besides the interest rates, the homebuyers will also be paying homeowners insurance and taxes.

All these are expenses that may be related to the mortgage loan and they should be factored in when taking the loan and making key decisions regarding the amount to take and how much to pay in monthly payments. Other people may need to have mortgage insurance, though this depends on the amount of down payment they will be making when they are getting the loan. If you plan for these expenses, you are in a better position to budget for the loan and sail through in your payment plan. A mortgage calculator comes in handy to help you in making these key decisions.

 Helps Factor-in Other Expenses

Because a mortgage has a big impact on your finances, there is need to take other expenses into account, and not just those related to the mortgage. For example, a homeowner unlike a renter, will not get services like heat, television, water, and others included the loan. So, homeowners should not just be worrying about only the mortgage related expenses but also other costs they have to incur in their day to day housing and financial life. A mortgage calculator becomes an important tool for you to consider other expenses that you incur before you take the mortgage loan. These expenses may include furniture, groceries, upkeep of your property, and the general maintenance of the property. If you are trying to figure out what you can reasonably afford when taking a mortgage, then all the other expenses have to be put into the picture.

 Helps with a Trial Run

When you use the Canadian mortgage calculator to find out the interest amount and the loan you may be approved for, you can give yourself a test. This is what is called the trial run – you are simply trying to test yourself and see if you can actually meet the challenge of paying for the mortgage or not. So, once you have decided the amount you want to take and determined the amount you will be spending per month, you should do a trial run. This will allow you to measure your ability to repay the loan without having a hitch. Remember that you have the other expenses, so you don’t want to overburden yourself.

What basically you want to do is find out if you can set aside that amount of money for paying the loan after spending on all other expenses for the month. If you find that you cannot do it, then you should reexamine your decision and choose a property that is less expensive or pay a larger down payment. And you know, when you make a larger down payment, it may reduce the interest rate you are paying, which also reduces the monthly repayments amounts.

Make wise Overall Mortgage Decisions  

Many people want to get the home that is at the top of the budget, which means getting a larger mortgage. But that can be tricky and often a bad decision. It is likely that you don’t need that expensive home for now, so you can go for a smaller house that is affordable and won’t put pressure on you through mortgage payment. You can then later on move to a bigger home or just expand the home you purchase rather than considering an expensive house in the beginning that only creates more financial troubles in your mortgage payment.

The decision on the amount you will be spending on a mortgage can be very intricate and unless you have taken a serious thought about it and considered all the expenses and costs you will be meeting, it is easy to make the wrong decision. However, a tool that can assist you in the process is the mortgage calculator. It may not show you exactly how much you should take, but it will help you get an estimate of the amount and then you can work out the interest you are paying, the monthly payments, and the other expenses and do a trial run to see if things are working out for you. The goal is to ensure you don’t stretch your budget to the limit and that you have money left with you for servicing the mortgage during the repayment period.

Features of a Mortgage Calculator 

A mortgage loan calculator should be simple and easy to use. It should also provide you with the kind of information or values that you want regarding the cost of a mortgage and what you are likely to be approved for. The calculator should tailor your mortgage calculations so that it represents the exact way the bank is charging. For example, a mortgage rate comparison helps you compare the different rates different banks are charging for their mortgage. You should determine which rate is going to work for you by doing comparisons. This way, you can get an affordable mortgage.

A fast, easy-to-use interface helps you to calculate your mortgage values in just a minute. If you encounter troubles when using the calculator, you should be able to get support, so a reliable access to help is needed.

In addition to comparing the rates for different banks, a mortgage calculator should tailor the calculations to match with those of your bank’s rates. The calculator allows you to customize the calculations to your bank. The loan interest calculator should also help you to create a schedule for payment of your mortgage while also allowing you to be send updates should the mortgage rates changes with time.

It is important to note that the different Canadian mortgage calculators may have different features, but they should be able to give you as much and accurate information and values as needed. They should also be updated often to reflect the current mortgage rates and those of individual banks.

Mortgage Amortization and Payment Frequency

 The amortization schedule or period is the length of time that a home buyer who has taken a loan will be able to take to pay off the entire mortgage. In Canada, the amortization period of a mortgage loan is 25 years. You may want to know that the amortization period is different from the mortgage term, which is the length of time you commit yourself to a specific rate, loan condition, and lender. The typical mortgage term in Canada is about 5 years.

When you talk of payment frequency, it may differ but many people would pay their mortgage loan once in a month. There is also the semi-monthly payment frequency, which implies that you pay twice a month meaning you have 24 yearly payments. Bi-weekly payments mean that you pay an amount after every two weeks and that would total to about 26 payments in a year. There are the accelerated bi-weekly payments, which mean you are paying the same amount that you would be paying if you had the semi monthly option, but this time, you will be making 26 instead of 24 payments in a year. The accelerated biweekly payments allow you to pay off your mortgage faster than in typical payments meaning you also save on the interest you have to pay.

When you make a down payment that is less than 20 percent of the home purchase price, you may have to pay for the mortgage default insurance. In this case, you may find that the maximum allowable amortization schedule or period, or the length of time you will be taking to pay the loan suppose the interest does not change, and you do all your regular payments, then the amortization period would be 25 years.

While mostly the amortization period is placed at 25 years, home buyers taking mortgage loans in Canada may accelerate that period to a shorter period so that they reduce the interest charges provided that they are comfortable with paying larger payments.

How to Use a Mortgage Calculator

 To use a mortgage loan interest calculator, you will enter the mortgage amount in Canadian dollars. You will also enter the mortgage term in years and then the interest rate in percentage. If you have a more advanced calculator, you may have other values to enter. When you enter the values as said, you will be able to get the total interest you will pay for that loan amount you entered. It is important to note that the Canadian mortgage interest calculator is only for Canada because different countries have different ways of calculating mortgage interest. The monthly mortgage payment calculator will show you the values you need for your monthly mortgage payment computations.

Manual Mortgage Calculator for Canada

 If you want to calculate the value for your mortgage manually, you may use this formula:

The above mathematical formula is for calculating the mortgage payments for every month in which case “M” stands for monthly payment and “P” stands for the principal amount, “r” stands for interest rate, and “n” stands for the number of payments you make.

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