Here’s a step-by-step guide for using your Basic Mortgage Calculator:
Basic Mortgage Calculator
How to Use the Basic Mortgage Calculator
This calculator helps users estimate their monthly mortgage payments based on their loan amount, interest rate, and mortgage term. Follow these steps to calculate your mortgage payment:
Step 1: Enter the Mortgage Amount (£)
In the first input field, labeled Mortgage Amount (£), enter the total amount of the loan you plan to take out for the mortgage.
Example: If your mortgage amount is £200,000, enter “200000.”
Step 2: Input the Annual Interest Rate (%)
In the second input field, labeled Annual Interest Rate (%), type in the interest rate offered by the lender for your mortgage. Ensure you enter the percentage as a numerical value without the “%” sign.
Example: If your interest rate is 3.5%, enter “3.5.”
Step 3: Enter the Mortgage Term (Years)
In the third field, labeled Mortgage Term (Years), enter the number of years over which you will be repaying your mortgage.
Example: For a 25-year mortgage, input “25.”
Step 4: Select the Mortgage Type
In the dropdown menu labeled Mortgage Type, choose between two options:
- Repayment: This option means you will repay both the interest and the loan principal over the mortgage term.
- Interest Only: This option means you only pay interest during the term, with the loan principal to be repaid at the end of the term.
Example: If you plan to repay both the principal and interest over time, choose “Repayment.”
Step 5: Click the “Calculate Monthly Payment” Button
After filling in the details, click the Calculate Monthly Payment button. The calculator will compute your monthly mortgage payment based on the entered information.
Step 6: Review the Results
Once you click the button, the results will appear in the Result Container at the bottom of the calculator. The result will display:
- Mortgage Type: The type of mortgage you selected (Repayment or Interest Only).
- Monthly Payment: The amount you will need to pay each month based on your loan, interest rate, and mortgage term.
Example Output:
- Mortgage Type: Repayment
- Monthly Payment: £987.65
Understanding the Results:
- Repayment Mortgage: The monthly payment includes both the loan principal and interest, which means you gradually reduce your debt over time.
- Interest Only Mortgage: The monthly payment only covers the interest, so you will not reduce the principal with these payments.
Example Calculation:
Let’s assume the following details:
- Mortgage Amount: £150,000
- Annual Interest Rate: 3.5%
- Mortgage Term: 25 years
- Mortgage Type: Repayment
After clicking the Calculate Monthly Payment button, the result might display something like:
- Mortgage Type: Repayment
- Monthly Payment: £753.77
Benefits of Using the Basic Mortgage Calculator:
- Quick Mortgage Estimate: Instantly calculate your monthly payments based on your loan, interest rate, and term.
- Mortgage Planning: Easily compare different mortgage types (Repayment vs. Interest Only) to understand which suits your financial situation.
- Budgeting Tool: Helps you plan and budget for your monthly housing expenses, giving you a clearer picture of how much you’ll need to set aside.
Use this simple tool to compare mortgages and make an informed decision based on your financial goals.
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