Tuesday, October 30, 2007

Relying On A Mortgage Calculator Can Be Risky

While the simple mortgage calculator was not much use for my friend’s purposes we did find a mortgage calculator that compared the interest rates of her existing lender with another lender she was considering refinancing with. Again though, this mortgage calculator was strictly considering the impact of interest rates over varying terms. My friend was comparing her existing mortgage manager loan with that of one of the big four banks. The bank had quoted her a monthly instalment which was lower than that being sought under her existing facility and this was confirmed when she compared the interest rates through the mortgage calculator. The interest rate was marginally lower than the mortgage manager’s rate. However when she looked at the fine print in the product details on the bank’s website she found that on top of the interest rate the bank was also going to seek a monthly fee of $8. She would also be paying for transaction fees on her account. When she added up the fees and the monthly instalment figure, the total monthly repayment was greater with the bank’s loan. So, while the mortgage calculator had indicated that she would be better off refinancing, the reality was that this was not going to be the case at all. She also realised that the bank’s monthly mortgage payment had been calculated over a 30-year term while her existing loan was arranged on a 25-year period. Obviously you will be paying a greater amount per month on a $250,000 loan if you choose to repay it over a shorter term. The mortgage calculator was able to quickly show the difference in the monthly figures over the different loan terms. Had my friend decided to proceed with the refinance and pay an application fee she would have been worse off financially once the refinance has been finalised.

Furthermore, the mortgage calculator did not factor in some important benefits she was enjoying, particularly a 100% offset loan feature which enabled her to reduce her monthly instalment significantly. By all means use a mortgage calculator as a guide but before committing to any fees or paying a deposit on a new purchase, check with a mortgage manager or other lender to make sure you and your mortgage calculator are on the right track. Before refinancing it is always a good idea to speak with your existing lender. Unless there is some event that has annoyed you and you have made the decision to leave because of the poor relationship you have with your existing lender, then discuss any concerns you might have with your existing lender - they will be willing to run through any mortgage calculator figures you want clarified and will be generally keen to retain your business.

While my friend was looking for a mortgage calculator to help her with a refinance decision others want to use a mortgage calculator when they are trying to work out the maximum purchase price they can go to on a property they are keen to buy. Just as in a refinance scenario, a mortgage calculator can be handy but make sure you check with a mortgage manager or lender before you exchange contracts. Most lenders will provide you with an approval in principle that will give you added comfort at auction or when negotiating with a real estate agent or vendor.

In Australia, a mortgage calculator can be useful but do not rely on it solely when making finance decisions that will have a significant impact on your cash flow over 25 to 30 years.



Blogger John said...


I greatly enjoyed looking through your blog "" and found an informative one for finance related topics.I have also some finance related web sites having more information regarding various financial problems and its solutions.So,I think it would be beneficial for both of us if we will join in a community.If you are interested then please contact me at- johnberts123(at)


October 2, 2008 at 4:40:00 AM PDT  
Blogger Sara DAr said...

Once you've found the best mortgage lender and best mortgage loan, start negotiating for the best possible deal. Mortgage lenders and brokers often change their prices for the same mortgage to different consumers for no apparent reason other than they can pocket some of the difference in price as profit. Ask your mortgage lender or broker to put down all costs of the mortgage in writing, then request that they waive or reduce some of the mortgage fee or lower the rate or points. You don't lose anything by asking.

Simple Mortgage Calculator

February 25, 2014 at 4:18:00 AM PST  
Blogger ninest123 Ninest said...

ninest123 10.17
prada handbags, red bottom shoes, michael kors outlet store, tiffany jewelry, ray ban sunglasses, nike air max, louis vuitton outlet online, christian louboutin, cheap oakley sunglasses, nike free, replica watches, polo ralph lauren outlet, louis vuitton outlet, louis vuitton handbags, kate spade outlet online, michael kors handbags, ugg outlet, louis vuitton, tory burch outlet online, burberry outlet online, michael kors outlet online, nike air max, christian louboutin outlet, cheap ugg boots outlet, oakley sunglasses, prada outlet, polo ralph lauren, ray ban sunglasses, louis vuitton outlet, tiffany and co, gucci handbags, replica watches, longchamp outlet online, christian louboutin shoes, longchamp handbags, cheap ugg boots, oakley vault, burberry outlet online, ugg boots clearance, michael kors outlet online, ray ban outlet, nike outlet, chanel handbags, cheap oakley sunglasses, oakley sunglasses, jordan shoes, ugg australia

October 16, 2015 at 8:37:00 PM PDT  
Blogger ninest123 Ninest said...

michael kors outlet online, air jordan, north face pas cher, mulberry uk, guess pas cher, nike air max, burberry pas cher, longchamp, nike roshe, coach outlet, coach outlet, hollister uk, nike air force, true religion outlet, michael kors canada, air max, scarpe hogan, ray ban uk, nike free pas cher, nike blazer pas cher, lululemon outlet online, michael kors uk, nike air max, true religion outlet, air max pas cher, louboutin, lacoste pas cher, ralph lauren uk, hermes pas cher, nike roshe run, abercrombie and fitch, kate spade outlet, longchamp pas cher, ralph lauren pas cher, new balance pas cher, michael kors, coach purses, true religion, true religion jeans, hollister, converse pas cher, nike free, sac vanessa bruno, vans pas cher, north face, coach outlet store online, tn pas cher, timberland pas cher, oakley pas cher, ray ban pas cher

October 16, 2015 at 8:40:00 PM PDT  
Blogger ninest123 Ninest said...

nike roshe, nike air huarache, baseball bats, p90x workout, ferragamo shoes, asics shoes, louboutin, vans outlet, herve leger, valentino shoes, nike air max, babyliss, new balance outlet, insanity workout, chi flat iron, nfl jerseys, ray ban, air max, abercrombie and fitch, giuseppe zanotti, hollister, mont blanc pens, oakley, converse, vans, longchamp, beats headphones, ralph lauren, north face jackets, reebok shoes, north face jackets, abercrombie, bottega veneta, jimmy choo shoes, iphone case, birkin bag, soccer jerseys, lululemon outlet, ghd, hollister clothing store, instyler ionic styler, converse shoes, nike trainers, celine handbags, mac cosmetics, wedding dresses, gucci, timberland boots, mcm handbags, soccer shoes, michael kors outlet, longchamp outlet

October 16, 2015 at 8:47:00 PM PDT  
Blogger ninest123 Ninest said...

michael kors handbags, ugg, moncler, montre femme, canada goose, sac louis vuitton, pandora uk, wedding dress, louis vuitton, swarovski uk, marc jacobs handbags, louis vuitton canada, moncler outlet, pandora charms, canada goose outlet, coach outlet, michael kors outlet, moncler, links of london uk, canada goose pas cher, uggs canada, louis vuitton pas cher, moncler, moncler, michael kors outlet online, swarovski jewelry, juicy couture, moncler, hollister canada, supra shoes, louis vuitton uk, canada goose outlet, moncler outlet, moncler, ugg boots, barbour jackets, doke gabbana outlet, pandora jewelry, canada goose, canada goose outlet, canada goose, ugg soldes, canada goose, thomas sabo uk, karen millen, sac lancel, replica watches, ugg, juicy couture outlet, barbour, toms outlet, pandora jewelry
ninest123 10.17

October 16, 2015 at 8:53:00 PM PDT  
Blogger Liu Liu said...

Louisville kept its recruiting momentum going on Saturday as they landed a Nike Air Max 90 commitment from four-star Class of 2018 guard Anfernee Simons. Regarded as the No. 72 overall prospect in the Rivals Class of 2018 national rankings, the 6-foot-2 louboutin outlet Simons is an cheap nfl jerseys explosive guard who can play on the ball and christian louboutin shoes really score. Simons nfl jerseys store led the Nike Roshe Run Under Armour Association’s 16U division Nike Air Max 2015 Shoes in Nike Free Run scoring this year as he put up 22.9 points per christian louboutin uk game while shooting NFL Jerseys 43 percent from three-point range. wholesale nfl jerseys

November 12, 2016 at 7:30:00 PM PST  
Blogger Accident Lawyer said...

Accident Need Save Yourself, Save the World For any car automobile accident personal injury Lawyer and Attorney Advice Also, all automobile and car insurance quotes guidance for free

December 31, 2018 at 4:58:00 AM PST  

Post a Comment

Subscribe to Post Comments [Atom]

<< Home