A mortgage is the bane of most people’s lives and is a massive financial commitment when purchasing a property. It’s essential to research properly; look at a number of mortgage companies to find the best and cheapest for you.

You can work out the best deal for you, without the pushiness of a company by using a mortgage repayment calculator. These online tools take into account a number of variables before working out how your repayments are likely to be structured, allowing you to decide which is the right mortgage for you.

The way you work your mortgage out depends on which type of mortgage you take out – there are two types of mortgage that are available.

Fixed rate mortgage:

• Payments stay fixed over a period of 2-5 years.
• After this period your mortgage will revert to your lender’s ‘standard variable rate’ (SVR).
• This will be a few percentages higher than the Bank of England base rate and can fluctuate.
• The mortgage calculator will work out the fixed rate for you.

Variable rate mortgage:

• There are two types of variable rates – tracker or discount.
• Tracker precisely follows the Bank of England base rate but at a margin above (eg. Base rate + 1%) then reverts to the SVR.
• Discount is simply a discount off the SVR, for example the base rate minus 1%.
• The mortgage calculator can work both of these out for you.

As well as taking out your mortgage loan, you also need to decide whether you want a repayment or interest-only deal. A repayment deal covers the loan and interest, whilst the other only covers the interest, so you need to save separately to pay off the loan.

Below are five simple steps on how to use a mortgage repayment calculator:

1. Enter your loan amount in your relevant currency.
2. Enter your term of loan (the number of years).
3. Enter your interest rate (%).
4. Enter your monthly payment in your relevant currency and the number of payments you wish to make.
5. The mortgage calculator will then work everything out for you!

It’s that simple! Mortgage calculators can be found online (see the link above) or speak to your mortgage provider for information on them.