Interest Calculations Made Easy
If you don’t have a mortgage but you plan to buy property in the near future, chances are that a bit of home loan education will go a long way to helping you make a good decision.
One of the most important things to understand is how interest affects your loan.
You probably already know that a home loan isn’t free - that’s why you have to pay interest back on top of the loan principal.
What you might not realise is that how you structure your loan will have a big effect on the amount of interest you end up paying over the term of your mortgage - and not just whether you choose a fixed or variable rate.
The key thing to understand is that interest is calculated daily. What does that mean? That means that the quicker you pay back your loan principal, the less you will be charged for interest each day.
An easy-to-use interest calculator can help you see how boosting your monthly repayments - or making extra payments - can pay back your principal faster and bring your total interest charges down.
To get more detailed information on your situation, talk to a Loan Market mortgage broker today.