Mortgage calculator: online loan simulation
June 10, 2019
What is a mortgage calculator?
Before becoming a homeowner and taking out a home loan, it is important to prepare your home or apartment purchase project , especially by defining your borrowing capacity.
That’s exactly what a real estate calculator is for. This online tool, offered by many credit agencies, allows you to calculate very simply the conditions of your David Balfourment: sum to borrow, duration of the mortgage, amount of the monthly repayments …
What does a mortgage calculator tell you?
The mortgage calculator tells you the essential information to know about your credit:
- The loan amount;
- The duration ;
- The amount of monthly payments to be repaid;
- The interest rate (or APR, annual percentage rate of charge, generally calculated from average mortgage rates observed);
- And sometimes the loan insurance rate.
Warning: the real estate calculator is a tool to help you, but the reported results have no contractual value. They give you an estimate, but are not guaranteed until they have been fixed by a contract with a credit institution.
Why calculate your mortgage?
If you have a real estate purchase project, using a mortgage calculator has many advantages. This simple step will allow you to:
- To avoid getting into tedious calculations: duration, monthly payment, loan rate … the real estate calculator does the work for you in a few seconds;
- To accurately assess your borrowing capacity and the conditions under which you can apply for a loan. The tool allows you to know the maximum amount you can assume.
Ideal to get dressed up and get the best David Balfourment from the credit institutions you will get close to!
Simulate different scenarios for his credit
Another important advantage of real estate credit calculators: they allow you to simulate different scenarios for your loan. Indeed, you can vary the duration of the credit or the amount of monthly payments to see the effect obtained on the total amount of the credit and the interest rate that is proposed to you.
The longer the term of the mortgage, the higher the interest to be repaid. The credit simulation allows you to find the most suitable compromise between the duration of the loan and the amount of monthly payments.
Mortgage calculator: how does it work?
The mortgage calculator works in two steps:
- You fill in the fields with your information: amount of the desired loan, duration of the credit or amount of the monthly payments;
- In a few seconds, the real estate calculator gives you its results based on your information. It shows you the loan term or the amount of the monthly payments (depending on what you originally entered), the total amount of the loan and the interest rate.
On some mortgage calculators, sliders allow to fill these elements even more easily.
If you know what monthly payment you would like to pay, be careful that its amount does not exceed one-third of your income. Beyond this limit, your repayment ability may be uncertain.