Mortgage Calculator

Instructions

1. Sliders - move the sliders to set the values of your principal, interest rate, loan length, and mortgage start date.

2. Data display - use the buttons to choose how you want the output to be displayed:
   • Summary - just shows a summary of the current values.

   • Amortization Graph - this shows how the total payment made each year is broken down. Note how the curves show increased principal and decreased interest being paid as time goes by. Also note that extra payments "push" up the principal curve, i.e. the annual principal amount shown is increased by the value of the extra payment. See also the Settings Menu option for this graph.

   • Repayment Chart - the percentage breakdown of the total payments made over the entire mortgage (or indeed, the breakdown of the average monthly payment).

   • Balance Graph - this shows the balance outstanding over the term of the mortgage. It is useful when extra payments are made to visually see how much sooner the mortgage is paid off, and how quickly the balance drops.

   • Annual Amortization Table - how much interest and principal you pay each year.

   • Monthly Amortization Table - how much interest and principal you pay each year, broken down month by month.

   • Settings:
     • Principal Amount - one of the most frequently requested features of the older versions of the calculator was the ability to make the principal amount go higher. I've put a ceiling of 500 million in the current version.

     • Static/Dynamic - static means that the calculations are done only when you're finished dragging a slider; this is the default. If you have a particularly fast machine or web browser, you can use dynamic mode, where calculations are done as you move the slider. Be warned that on some browser/machine combinations, this can be too much for the Java virtual machine implementation, and can cause the browser to hang or crash.

     • Interest sliders - You can use either 1/8th increments or decimal places.

     • Amortization - The system used for calculating American monthly mortgage payments is the same or very similar to many other countries around the world. Canadian financial institutions use a slightly different formula.

     • Dollars/Pounds/Euros/Rands - This is purely cosmetic. It makes no difference to the calculations. People in my part of the world just prefer using the pound or euro sign!

     • Amortization Graph - Normal mode works as described in the amortization graph section above. Stacked mode shows principal, interest and extra payments all stacked on top of each other. Unlike normal mode, there is no overlap between data.

     • Monthly/Bi-weekly payments - Limited support for bi-weekly mortgages is present through this option. When Bi-weekly payments are selected, an extra half-monthly payment is made every six months. This equates to making 13 monthly payments every 12 months - a close approximation of how a typical bi-weekly mortgage will work out.

     • Language - Again, this is purely cosmetic. The language used does not affect the calculations.

3. Input Box
   • Initial Loan Data - if you don't like using the sliders, you can enter data directly in this section. Values for the Tax and Insurance fields are simply divided by 12 and added to the monthly payment amount. The inflation figure allows estimates in real terms (i.e. in "today's money") to be calculated. The total interest paid over the entire mortgage is shown on the right hand side along with the total interest paid as a percentage of all payments made (see the Repayment Chart for a graphical view). Finally, the total interest paid in real terms is displayed - this figure is an attempt at calculating how much the total interest paid is worth in real terms.

   • Prepayment Data - this section gives you the opportunity to estimate how you can shorten the term of your mortgage by making either a single one-off payment or continuous extra monthly or annual payments. On the right-hand side, the Savings field shows you how much money you will save, while the Real Savings field once again uses the inflation rate to give a rough estimate of what these savings are in real terms given that the interest savings are spread over a number of years. The dates shown reflect what happens to the mortgage term when the extra payments have been factored in.

Important: When entering values into the "Input Box", make sure to press "Return" after you enter the last value. Using the TAB key will work on some browsers, and clicking the mouse over the next box is fine too, just make sure the last value you enter has been recognised by the calculator, and is being taken into account when calculations are made.