Here’s an interesting tool I found while trying to find out which mortgage product reduced the overall debt by the most over a certain period.
How to use the calculator:
This calculator produces ‘amortization’ tables for the mortgage which show the remaining balance at the end of each year.
If you are looking at a 5 year fixed offer, you must put in the entire term of the mortgage eg. 25 years then look at the tables to find the end of 5 years.
The rate you input is used for the entire term but if you are considering a 5 year fixed mortgage, the table will show the mortgage balance at the end of 5 years.
If you are looking at a variable rate mortgage, any calculation will not reflect any changes in the rate but if you want to know how your mortgage will be affected by changes simply put a higher or lower figure for the rate and calculate again.
When calculating don’t forget to add any fees onto the amount you wish to borrow for an accurate calculation.
For example if you are looking at a mortgage with a 5 year fixed rate and you wish to borrow £150,000 but the lenders arrangement fee is £1500, (unless you are paying this upfront) the total borrowing will be £151,500.
This way you can easily find out if a Fixed rate mortgage with an arrangement fee will leave you better off at the end of the offer period than a mortgage without an arrangement fee.
To find out your current mortgage balance, your lender will be able to give you an exact figure.