A lot of people are looking online for a Home Loan Repayment Calculator and they are pretty easy to find. Most of my readers are in certain countries and therefore I’ll just give you a few links at the bottom to help you for those countries.
I’m in the process of writing a FREE eBook about common mistakes people make when they buy a home and one of the top ones is underestimating how much money they need. If that’s of interest to you, make sure you subscribe to this blog, because that’s how you’ll find out where to get it.
When you are shopping for a house, you generally work out how much deposit you need or can afford to pay. Then you look at your household income and try and work out if you can afford the house you were looking at.
If you can, great! If not, then start working backwards and see how much you can afford to spend. My advice then is to add on some more.
I covered much of this information in my Amazon Kindle book Buying a House – Using Real Estate Apps, Maps and Location Based Services. I so wish I had chosen a shorter title! I just wanted people to know that I was offering something unique in a world of look alike books.
The FREE eBook I am writing touches on the reasons why you need to borrow more money than just the cost of the house. It includes:
- Insurance. Now you need house and contents insurance. I include examples, but bottom line is without it, you will not get any money from the bank. You might also want Income Protection Insurance.
- Legal Fees. You can’t buy a house without your lawyer and most charge in 6- minute segments!
- Council Reports. These used to be free but in many countries you now have to pay for the documentation that tells you what you are buying, the legal boundaries and what if any of the improvements are legal and permitted. Well it won’t tell you what wasn’t approved, but get that report before the building inspection and you”ll find out.
- Building Inspection. You shouldn’t buy a house if you haven’t had it checked out by a professional. You might buy a car without an appraisal, although I wouldn’t. You are buying the most expensive asset you will ever buy. Quality inspections aren’t cheap.
- Rates and Taxes. If you were a renter, these were included in the rent.
- Improvements and repairs. Not everything will be to your liking and I’m sure there will be the odd renovation that you want to make.
- Furniture and Fixtures. They looked OK in your old place, but don’t belong in the new one and the house looked so much nicer when you viewed it than when you put your old stuff in it, and the color is wrong.
So now you know you need to allow more than you thought. The online calculator might include some tips, but I suggest you do a bit of homework so you aren’t in for any surprises.
Many banks today recommend you mix your borrowing up into flexible loans and fixed loans and you might consider a mix where you can pay some of these above items off sooner so that you can then focus on building up equity in your house.
So here are a few options and I recommend you use one that is set up for your country because there are differences:
Australia:
- This site from the Audited Media Association of Australia looks really good, because it includes some of the things I mention above and also includes some other great features like a variety of current bank interest rates and an income and expenditure worksheet.
- Every bank has calculators. After all they want to loan you money. Here’s what Westpac has to offer in Australia.
Canada
- Ratehub has a great set of tools for Canada including taxes by State. It also has something called a Mortgage Affordability Calculator. Possibly a good place to start. Don’t disappoint yourself with a property that is truly out of your reach.
- Royal Bank not only gives you the mortgage calculator, but also has a tool to give you an idea of the estimated value of your home, IF you bank with them.
New Zealand
- Sorted has a simple calculator that includes a print function. A nice feature is that if you include your age, it will tell you how old you will be when the mortgage is paid off. It also allows you to look at the impact of paying a little more each month.
- I bank with ANZ, so I suppose I should include them. They have a site packed with calculators including encouragement to switch to them. They say the are the biggest lender in the country.
United Kingdom
- The Nationwide Building Society has a nice catch phrase to go with their calculators. ‘Find a Mortgage You Feel at Home With’. I like that.
- I couldn’t do UK without including Barclays, so here is their offering.
USA
- If you’re in the USA, I’m sure you know about Zillow. If you are looking at houses you should go there anyway. Here are their tools.
- According to their headline, MortgageCalculator.org has the best calculators available of the Unites States. They also show local rates and much more information.
I think the common denominator is that banks can’t afford for you to fail financially when you are buying a house. Sure they want your business, but they want your successful business, because they know that if you buy a house and can make the repayments. Sometime in the future you will sell it and buy a more expensive home and borrow even more money from them. That’s how they make money, not by you saving money.
I hope that’s been helpful and welcome any comments.
SoLoMo Consulting 