One of my more useful sites is the Mortgage Calculator. Actually, it’s now so useful I’ve renamed it Mortgage Analyser. A calculator is something that sits on your desk which you type 55378008 into and turn it upside down for a juvenile flashback. An analyser however, is something that throws more data at you than you know what to do with.
So what is the point of it? It’s fundamental purpose is to get one over on the banks and building societies. Their goal is to sell you as expensive a mortgage as they can trick you into. Currently, a popular way of doing this is to give you a low rate of interest but hit you with huge arrangement fees. So how do you work out if it’s worth paying a higher fee for a better rate? Well, you could work it out on a bit of paper I suppose.
Or you could analyse it online. Just put the numbers in:
- The amount you are borrowing
- How long the mortgage is for
- The interest rate
- Any fees
And get the answers instantly. Find out what you will be paying, how much more you’ll be paying if you are on a tracker and the interest rate changes and how much you’ll pay in total. Of course, if you’ve looked at the analyser then you’ll have noticed that it does a lot more than just that.
- Two mortgages can be directly compared with each other.
- Fees can be either added on to the mortgage or paid outright. Whichever fees are paid by whatever method, it’s automatically taken into account for the calculations.
- Discounted rates for limited periods are catered for
- You can see how much earlier the mortgage will end if you make additional payments into it each month. It will also tell you how much money you’ll save.
- Because you are borrowing money over decades, inflation starts having an effect on the calculations. While the actual amount you pay doesn’t change over the life of the mortgage, what it’s worth does. In this example, 585 in 40 years time will be the equivalent of what 209 is now. Although you are paying 281019, in real terms the value of the money is only 173823.
There is also a graph which shows how the balance of your mortgage goes down over time. It’s a bit pointless but it does show that for the first few years you aren’t paying much of it back (the line is quite flat) and it does graphically illustrate how much better off you’d be if you made extra payments each month.
That’s it for this utterly humourless post. We now return to the regular programming of swearing and ranting.