I was reminded the other day about just how important a home loan repayment calculator can be. How’s that?

Well, I’m in the market for a house for myself right now and although the bank will lend me a certain amount I don’t want to use all of it because I have a budget that I’m sticking to. You see, I don’t want to pour all my income into home loan repayments. Nope. I actually want a life as well! For me having the ability to save up for an annual holiday and put petrol in the boat so I can go fishing etc is really important.

This is where the home loan repayment calculator really came into it’s own because it told me ‘how much loan my repayments will buy’ and in turn what price bracket I was looking at. It also told me I need to be very hardnosed when negotiating the purchase price!!

Where can you find a home loan repayment calculator? Google. Or Sorted.co.nz. And using it is very simple – just plug in the amount you want to borrow, a period of time over which you want to make repayments (20, 25, 30 years), the interest rate and you’ll get an answer.

A couple of words of caution when using a home loan repayment calculator. Firstly, the result is only an approximation because the way you structure your loan (maybe some fixed, some floating) has a bearing on the how big your repayments might be. But it’s still a pretty good way to gauge what you’re up for. Secondly, we expect interest rates will be higher in a few years time than what they are now so you’d be wise to double check to see if your budget can handle a gradual upward shift in repayments. Plug in some different rates to see what happens.

So there you have it, a home loan repayment calculator is a great tool to help with your decision making when it comes to buying a house.

About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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