Morgages Calculator

Provides information about Morgages Financing including renting vs buying, variable vs fixed and home loan benefits.

What is a home loan

A home loan (also called a mortgage) is a loan agreement that enables a person to borrow money to buy a house or other property. The property is used as security for the loan. The lender may take possession of the property if the loan cannot be repaid. A person may obtain a mortgage any financial institution that offers. A standard loan includes a Principal (unpaid loan amount) and interest over a 25 year period. Depending on the loan agreement, the home loan may come at either a variable or fix interest amount.

As you pay off the loan initially a large portion of your loan repayment will go towards the interest. However as the borrower pays off the loan, more of the each monthly payment goes to the principal and less towards the interest eventually paying off the loan.

Variable Vs Fixed Interest rate

Variable rate depends on the official interest rate set by the central bank of each country. This rate in conjunction with the banks spread forms the interest rate. This variable rate can fluctuate depending on central bank strategy, by cutting interest rates, there will be a reduction in repayments and increasing interest rates means an increase in repayments to your lender.

Fixed rate is a fixed interest rate set by the agreement with your financial institution; this rate is set for the life of the loan period agreed upon with your institution. This means you will have a set repayment to pay consistently through the life of your loan.