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Pros and Cons of Online Mortgage Calculators

Online mortgage calculators are widely used by home buyers today. If you are planning buy your next house, you should use these tools to determine how much you can fork out for your next house. This is not to say that the use of online mortgage calculators is flawless – they have their advantages and disadvantages. Read on to find out what these are.


Know What You Can Afford

mortgage calculatorTaking a loan without knowing whether you will be able to make the repayments is disastrous. Using an online mortgage calculator, you will be able to determine the amount of the individual regular repayments including things like taxes, insurance, interest, etc. There are calculators you can use for calculating monthly, weekly and even bi-weekly repayments. An example is our Bi-Weekly Mortgage Calculator that you can use to find out how much you can save on interest when you make bi-weekly payments.

Mortgage Rate Comparison

It is not easy to choose between two mortgages by just looking at them. Using an online mortgage calculator, however, you can easily enter the different parameters and compare the outputs. Since you should never take out a mortgage without first comparing different lenders, a comparison calculator is indispensable. For example, you can use the Mortgage calculator here  to find out how much you can save on different mortgages by accelerating your payments.

Playing with Figures

An online calculator allows you to make numerous tiny adjustments on the figures and evaluate their effects. You can adjust the number of years for repayment, rate of interest, frequency of repayment and even the down payment. This allows you to figure out the best and most realistic mortgage offer.


Rent vs. Own Decision

Before you rent or buy a home, you need to evaluate what the long term ramifications will be. Find out if you can use your rent to pay for a mortgage and buy a house instead of renting one. Or maybe your rents are too low to service a mortgage within a realistic period. You can only know for sure by using calculator such as a rent vs own calculator.

However, you should be aware of a few drawbacks of using these calculators such as:

Calculating Intangibles

Mortgage calculators can only give their results in terms of figures. On the other hand, there are many other things that you need to consider before taking a mortgage, and some of them are not monetary. For example, on the plus side even if you can use the same money for rent as you would for mortgage repayments, owning a home has a feel-good effect that you will miss if you are paying rent and you will be building equity in the home. On the minus side, there is the cost and headaches of maintaining a home once you have bought one, while in a rental that would be left to the landlord. These are factors you cannot deduce from an online calculator.


Many online calculators offer estimates, and not the actual figures. This is mainly because there may be other external factors that cannot be factored into the calculation. For example, inflation has a huge effect on your mortgage repayment but many calculators do not factor it in. You need to use an inflation calculator to find out how inflation will impact on your costs. The advantage of a mortgage is that it locks in a current payment (as long as it is a Fixed rather than a variable mortgage) and so inflation doesn’t affect your mortgage payment but will affect your rent as over the years your landlord will raise the rent to cover his inflation related costs.

Though there may be drawbacks associated with the use of online mortgage calculators, they are nevertheless very useful. Their advantages far outweigh their limits, and their use in the mortgage industry today is indispensable.

See Also:

 Mortgage Calculator Resources from Amazon:

photo credit –  By Images_of_Money