| Go to Calculator |
HOW TO USE THE MORTGAGE CALCULATOR |
| Sliders |
Move the sliders to set the values of your
principal, interest rate, loan length, and mortgage start date. |
| Data display |
Use the buttons to choose how you want the output to
be displayed: |
| Summary |
Just shows a summary of the current values. |
| Amortization Graph |
This shows how the total payment made each year is
broken down. Note how the curves show increased principal and decreased interest being
paid as time goes by. Also note that extra payments "push" up the principal
curve, i.e. the annual principal amount shown is increased by the value of the extra
payment. See also the Settings Menu option for this graph. |
| Repayment Chart |
The percentage breakdown of the total payments made
over the entire mortgage (or indeed, the breakdown of the average monthly payment). |
| Balance Graph |
This shows the balance outstanding over the
term of the mortgage. It is useful when extra payments are made to visually see how much
sooner the mortgage is paid off, and how quickly the balance drops. |
| Annual Amortization Table |
How much interest and principal you pay each
year. |
| Monthly Amortization Table |
How much interest and principal you pay each
year, broken down month by month. |
| Principal Amount |
One of the most frequently requested features of the
older versions of the calculator was the ability to make the principal amount go higher.
I've put a ceiling of 500 million in the current version. |
| Static/Dynamic |
Static means that the calculations are done only
when you're finished dragging a slider; this is the default. If you have a particularly
fast machine or web browser, you can use dynamic mode, where calculations are done as you
move the slider. Be warned that on some browser/machine combinations, this can be too much
for the Java virtual machine implementation, and can cause the browser to hang or crash.
|
| Interest sliders |
You can use either 1/8th increments or
decimal places |
| Amortization |
The system used for calculating American monthly
mortgage payments is the same or very similar to many other countries around the world.
Canadian financial institutions use a slightly different formula. |
| Dollars/Pounds |
This is purely cosmetic. It makes no difference to
the calculations. People in my part of the world just prefer using the pound sign! |
| Amortization Graph |
Normal mode works as described in the amortization
graph section above. Stacked mode shows principal, interest and extra payments all stacked
on top of each other. Unlike normal mode, there is no overlap between data. |
| Monthly/Bi-weekly payments |
Limited support for bi-weekly mortgages is present
through this option. When Bi-weekly payments are selected, an extra half-monthly payment
is made every six months. This equates to making 13 monthly payments every 12 months - a
close approximation of how a typical bi-weekly mortgage will work out. |
| Input Box |
|
| Initial Loan Data |
If you don't like using the sliders, you can enter
data directly in this section. Values for the Tax and Insurance fields are simply divided
by 12 and added to the monthly payment amount. On the right-hand side, the total interest
paid over the entire mortgage is shown along with an estimate in real terms (i.e. in
"today's money") given the figure for inflation entered in the subsequent
section. |
| Prepayment Data |
This section gives you the opportunity to estimate
how you can shorten the term of your mortgage by making either a single one-off payment or
continuous extra monthly payments. On the right-hand side, the Savings field shows you how
much money you will save, while the Real Savings field once again uses the inflation rate
to give a rough estimate of what these savings are in real terms given that the interest
savings are spread over a number of years.
Important: When entering values into the "Input
Box", make sure to press "Return" after you enter the last value. Using the
TAB key will work on some browsers, and clicking the mouse over the next box is fine too,
just make sure the last value you enter has been recognized by the calculator, and is
being taken into account when calculations are made.
If you are unable to even enter
data in the prepayment fields, there is a good chance that the problem is with your
browser. Try upgrading to the latest version, or try the applet on a different machine
with a different browser.
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