Compare Two Mortgage Calculator
Step-by-Step Guide for Using the Compare Two Mortgages Calculator
Compare two mortgage calculator, including interest rates and associated fees, to determine which deal offers better long-term savings. Follow the steps below for accurate results:
Compare Two Mortgages
Mortgage 1
Mortgage 2
Step 1: Enter the Mortgage Amount (£)
In the first input field, type the total amount you plan to borrow for your mortgage. This is your principal loan amount.
Example: If your mortgage is £150,000, enter “150000.”
Step 2: Enter the Mortgage Term (Years)
Next, enter the length of your mortgage in years. This is the time period over which you will be repaying the loan.
Example: For a 30-year mortgage, input “30.”
Step 3: Choose the Mortgage Type
You will need to select whether you are looking at a Repayment mortgage (where both the principal and interest are paid monthly) or an Interest Only mortgage (where you only pay interest during the mortgage term and repay the principal at the end).
Example: Choose “Repayment” if you plan to pay down both the loan and interest over time.
Step 4: Input Interest Rate and Fees for Mortgage 1
- Interest Rate (%): Enter the interest rate offered by the first mortgage option.
- Fees to Take Out Mortgage (£): Enter any upfront fees associated with securing the first mortgage.
Example: For Mortgage 1, if the interest rate is 3.5% and fees are £1,500, enter “3.5” and “1500.”
Step 5: Input Interest Rate and Fees for Mortgage 2
Repeat the same process for the second mortgage option:
- Interest Rate (%): Input the interest rate offered by the second lender.
- Fees to Take Out Mortgage (£): Enter the associated fees for this mortgage.
Example: If Mortgage 2 offers a 4% interest rate with £1,000 in fees, input “4” and “1000.”
Step 6: Compare Over (Years)
In this field, input the number of years you would like to use for the comparison. This allows you to see the cost of each mortgage over the same time period.
Example: To compare both mortgages over the first 10 years, input “10.”
Step 7: Click the “Compare Mortgages” Button
Once you’ve entered all the necessary details, click the Compare Mortgages button to see the results. The calculator will analyze both mortgage options and display the cost of each over the specified comparison period.
Step 8: Review the Results
After calculating, the results will show a breakdown of the total cost of each mortgage, including interest paid and fees. You will be able to compare:
- Total Cost Over Comparison Period: The overall cost of each mortgage (interest plus fees) over the specified number of years.
- Savings or Extra Cost: A comparison showing which mortgage saves you more money or costs more over time.
Example: For Mortgage 1 (3.5% interest, £1,500 fees) and Mortgage 2 (4% interest, £1,000 fees), if you compare over 10 years, the result might show that Mortgage 1 is £5,000 cheaper overall due to the lower interest rate, despite the higher upfront fees.
Benefits of Using the Mortgage Comparison Calculator:
- Understand True Costs: By factoring in interest rates and fees, you can get a clearer picture of the total cost of each mortgage.
- Long-term Savings: Identify which mortgage saves you the most money over time.
- Quick Analysis: This tool provides an easy-to-use, fast comparison of mortgage options, helping you make a more informed decision.
By following these steps, you can confidently compare two mortgage options and choose the one that aligns best with your financial goals. Adjust the inputs for different loan amounts, terms, or interest rates as needed to explore various scenarios.
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