It is a well known fact that you can save a lot of money in interest by paying off your bond as quickly as possible. This means putting down as large a down payment as possible in order to reduce the principal loan amount and, consequently the loan time. If you can reduce the period of your home loan from thirty years to twenty, you stand to save a lot of money in interest in the long term. Ten years is a considerable number of years to shave off the time you would expect to pay off a bond but can you afford it? You don’t want to put down such a large down payment that you are unable to afford to meet the monthly repayments. And this applies to any bond, not just those where large down payments have been made. The bond rate can go up at any time, and if your budget is already stretched in order to meet your monthly repayments then you will most likely not be able to afford to pay a higher repayment each month. Spending some time with a mortgage calculator before you apply for a bond can help you avoid overextending your budget and making your life miserable, perhaps for years.
Of course, you can get a broker to calculate your mortgage for you and the bank will most certainly do it when you apply for a home loan but it is nice to be able to make some of the initial calculations yourself. Doing your own initial calculations will put you in charge of your finances and give you a sense of control. The knowledge you will gain from using a mortgage calculator will benefit you for the duration of your bond and help you to attain the best possible financial position you can be in regarding your bond. Mortgage calculators can easily be found online but one thing you should know, however, is that there are a number of different kinds and each will provide you with a different set of calculations depending on which one you are using. There is a calculator that will tell you what your monthly repayments will be and one that will tell you how much you can save by paying off your bond more quickly. Then there is a calculator that can tell you how much you can expect to pay in bank charges, transfer fees and bond registration fees, for example, and calculators with amortisation tables attached that provide a comprehensive run down of costs and payment over the entire bond period. There is even one you can use to calculate whether you can afford a bond or not based on your disposable monthly income.
A final point to bear in mind when using a mortgage calculator is that the calculations you will get from it will be estimations and are bound to vary slightly from the final figures you will receive from the bank. Nevertheless, a mortgage calculator should give you a close enough estimation of what you can expect to pay on a bond that it is well worth using one.