This calculator is designed to be played
with - enter your interest rate and guess how much you
expect to pay each month to pay the loan off over 25 years.
Try different numbers until you get a
number in year 24 and a zero in 25. (At this point it
means that your mortgage will terminate during the last
year).
Then put in the maximum you might be able
to pay each month into the calculator and see what a difference
it makes to the overall payment and time taken to buy
your house.
In practice you do not have to commit
to this higher amount every month - simply setting money
aside and putting it in as a capital reduction when you
can spare it will have the same effect. (This may be of
particular note to those who have special deals that penalise
early capital repayment).
Note - surprisingly small accelerated
payments can shorten the mortgage by several years and
lead to savings of thousands of pounds.
Cheat - for a £100,000 mortgage at 10% interest try 878.5
in the 25 year column and 1100 in the accelerated one.
Interest - for mathematical purity the
interest is calculated on the basis of the twelfth root
of the rate selected, and the outstanding capital recalculated
each month. In practice mortgage maths is different in
detail and so do not expect these figures to match those
of any quote.
