Buying a house is a big financial commitment, and choosing the most appropriate home loan will save you big time in monthly repayment. If an interest-only mortgage is what you are thinking of, using an Home Loan Interest
Calculator will provide you with an estimation of the costs and enable you to make intelligent decisions.
What is an Interest-Only Mortgage?
An interest-only mortgage allows borrowers to pay payments of just the interest on the loan for a certain amount of years, usually 5 to 10 years. Payments increase to cover both principal and interest, or the borrower re-finances or pays off the amount.
Benefits of Interest-Only Mortgages:
- Lower Initial Payments – Lower payment each month since only interest is paid.
- Flexibility – Ideal for people with unpredictable incomes or who foresee future increases in finances.
- Investment Potential – Can potentially release cash flow to invest elsewhere.
How Does an Interest-Only Mortgage Repayment Calculator Work?
The calculator helps you determine how much you’ll pay each month in interest payments and how much you’ll repay when the interest-only period is over.
Using the Calculator:
Using the calculator to deduce the payments has never been easier. Here is how you can easily find out your interest payments as well as your future payments.
- Enter Loan Amount – Input the mortgage amount.
- Set Interest Rate – Input the interest rate.
- Select the Loan Term– Choose the loan term length.
- Select your Repayment Schedule- Select the repayment frequency as monthly, quarterly, half-yearly and yearly.
- Calculate Your Payments – Calculator will provide an estimate of your interest payments and future repayments.
Things to Consider Before Selecting an Interest-Only Mortgage
Although this mortgage takes the form of lower initial payments, there are a few things to keep in mind:
- Higher Total Amount Paid Interest – Since principal is not paid during interest-only period, total cost of interest may be higher.
- Future Payment Increase – Payments will rise after the interest-only period has lapsed.
- Lender Terms – Some lenders have more stringent terms for interest-only mortgages.
Who to Use an Home Loan Interest Calculator?
- Home Purchasers Wanting to Take an Interest-Only Mortgage – Enjoy affordability before committing.
- Property Investors – Consider costs when making buy-to-let property investments.
- Home Owners Seeking to Refinance – See if refinancing an interest-only mortgage is possible.
Seek Professional Mortgage Guidance
An Interest-Only Mortgage Repayment Calculator is great for budgeting estimates, but the ideal mortgage choice needs expert advice. At UK Property Accountants, we help home owners and investors with expert advice in considering mortgage alternatives to achieve the best financial rewards.
Use our Home Loan Interest Calculator today and take control of your home loan!
