Have you found your dream home, but you aren’t sure if you can afford it?
Are you scratching your head and asking which is the better loan to choose between two lenders?
Use a home loan calculator to find out. A
home loan calculator is an online tool available at websites such as BidMyLoan that can answer questions such as:
- How much are my loan repayments?
- How much can I afford to borrow?
- How much can I save when I compare two loans?
When selecting the right home loan for you, do not look at the interest rate in isolation. For an accurate estimate of repayments, your
home loan calculator will take into account the variables of your loan package like:
- Loan term (the longest term typically stretches to 30 years but this can be culled if you make higher repayments)
- Any interest-only periods
- Ongoing fees
- Exit fees
- Establishment fees
- Early pay out fees
- Early repayment fees.
As every loan features variables like these, a
home loan calculator should only be used as a general guide to estimate your loan repayments, but not as a definitive guide for the total cost of your loan. For that, look at your home loan contract with your lender, which will outline the full cost of the loan and break down the total interest, principal and fee payments.
Advanced home loan calculators available at the websites of various lenders can address complex queries such as:
- Can I afford an investment property with my current earnings and liabilities?
- How much capital gains tax will I have to pay on an investment property?
- How much stamp duty will I need to pay?
- If I make a lump sum payment, by how much will this reduce my loan?
Using a home loan calculator is just the start of getting a good deal on a home loan. Three tips to make a home loan work for you include:
1. Making your repayments more often: this includes opting for weekly or fortnightly repayments rather than monthly repayments, which will result in at least 13 repayments per year rather than only 12.
2. Making extra lump-sum payments: the quickest way to reduce the amount of interest you will pay is by paying out your home loan faster. You can see the difference this will do to your loan using BidMyLoan’s
home loan calculator.
3. Considering the loans with the lowest interest rates: but do not limit your search to these alone. You should review your loan package holistically, looking at the fee structure to make sure money saved on your rate is not money lost in charges.
BidMyLoan is a mortgage auction website that allows up to 20 lenders to “bid” for your loan by offering you their most competitive interest rates and home loan packages.
All you need to do is fill out one online application form and lenders will step forward at the site to offer you their best deal.
For more information about a home loan calculator or home loan auction, go to
bidmyloan.com.au or call 1300 BID MY LOAN.
This article was brought to you by
BidMyLoan, helping first home buyers, refinancers and investors find a better home loan in Australia.
