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A mortgage calculator is a useful tool provided online, virtually always free of charge, to prospective or current homebuyers. Mortgage calculator tabulation is automated instantly, using high-level, engineered formulas. These calculations can help users deduce what they can truly afford to pay in home costs. A mortgage calculator can take several financial items into consideration including:
- Down payment
- Interest rate
- Mortgage term length
- Amortization period
- Payments made per year
- Compound interest
- Tax deductible interest payments
- Lump sum payments
- Mortgage insurance premiums
- Property taxes
- Heating costs and utility bills
- Other outstanding debts
The greater the amount of fields a mortgage calculator allows you to input, the more conclusive and accurate the mortgage budget it generates will be.
Canadian mortgage calculators take into consideration semi-annual compounding, and should provide for you a breakdown of your payments throughout an entire amortization. A mortgage calculator can tabulate the allocation of funds as they apply to both the principal and interest payments on your loan balance.
It is recommended that potential homebuyers, as well as current homeowners approaching their mortgage's renewal date or considering the option of refinancing their current mortgage, utilize a variety of mortgage calculators. In the interest rate and term length fields of the mortgage calculator, try inputting various rates and terms. Look at the current fixed rates and variable rates available at various institutions, and use the mortgage calculator to deduce which option would see the quicker pay-down of your mortgage principal.
You can also play with the down payment field on your mortgage calculator trials. The more you are able to contribute toward your down payment, the more funds you are applying to the loan's principal, and thus the less interest you will be paying overtime. However, does contributing the maximum amount that you can toward a down payment leave your finances stretched? Will you be able to make other payments or will you be forced to use high interest credit to compensate any repairs or other unexpected costs that arise following home purchase?
These are some of the many questions that a mortgage calculator will help you to answer. Coming into a better understanding of your true financial position can only benefit you.
Aside from the Web, a mortgage calculator can be found on most hand-held financial calculators, such as TI BA II Plus, on various software programs, or in freely downloaded Excel spreadsheets.