How This Mortgage Comparison Calculator Work

This mortgage comparison calculator helps you choose between two mortgage options by showing which one might be a better fit for you.

Enter the key details, and you’ll get results in LESS than 30 seconds. ⏰

Bear in mind that the calculator provides estimates based on assumptions. Always get a specific quote from your lender to verify the actual price. 

While this tool can assist you in making your decision, it may not account for your entire situation. 

For personalised advice, speak to a qualified mortgage advisor. Note that we cannot be held responsible for any errors.

How To Use This Mortgage Comparison Calculator

Our mortgage comparison calculator is easy-to-use, but to get the most out of it, you must:

1. Gather your information – Before you start, make sure you have all the details about the mortgages you want to compare. This includes the loan amount, interest rates, term lengths, and any fees.
2. Input the data – Enter this information into the calculator for each mortgage you’re comparing. Be as accurate as possible – even small differences can have a big impact over the life of a loan.
3. Review the results – Once you’ve entered all the data, the calculator will provide you with a comparison. This usually includes monthly payments, total interest paid, and the overall cost of each mortgage.

Don’t be afraid to adjust the figures. What happens if you increase your monthly payments? Or if interest rates change? 🗒️

Our calculator lets you model different scenarios, giving you a fuller picture of each mortgage’s potential.

You can also use this calculator when looking to remortgage.

Remember, the goal isn’t just to find the cheapest option, but the one that best fits your financial situation and goals.

📝 Things To Consider

When using a mortgage comparison calculator, keep these key points in mind:

• Accuracy Matters – Double-check your details. Even small mistakes in interest rates or loan terms can change the results significantly.
• Privacy First – The calculator doesn’t save your information, so you’ll need to re-enter your data each time. This is good for your privacy.
• Estimates, Not Offers – The results are just estimates. Actual mortgage terms can vary based on your credit score, job history, and the lender’s rules.
• Additional Costs – Remember to include costs like mortgage insurance, property taxes, and homeowners insurance, which the calculator might not cover.
• Starting Point – Use the calculator for an initial idea, but also talk to mortgage professionals to fully understand your options.

About Your Results

Once you use the mortgage comparison calculator, you’ll see a set of results. 

Here’s what they mean:

Monthly Payments

This shows your monthly payment for each mortgage option. 

For repayment mortgages, it includes both principal and interest. 

For interest-only mortgages, it covers only the interest, so you’ll still owe the principal at the end of the term. 

Remember, a lower monthly payment isn’t always better if it means paying more in interest over the long term.

Cost (Depending on the comparison year you selected)

This shows the total cost over the chosen comparison period, including all monthly payments and fees.

 It helps you understand the short-term financial impact of each mortgage option.

Full Term Cost

This is the total amount you’ll pay over the entire term of the mortgage, including both the principal (for repayment mortgages) and all the interest. 

It gives you the BIG picture of your long-term financial commitment.

Remember, these results assume you’ll keep the mortgage for its full term and that interest rates (for variable rate mortgages) will remain constant. 

In reality, you might move house, remortgage, or see interest rates change. 

Use these results as a guide, but be prepared for real-world variations.

Digging Deeper: Comparing Mortgages

Getting a mortgage is a huge financial step. 

So, it’s crucial to know how to compare them, what factors to consider, and how to tell if you’ve got the right one. Here’s a deep dive:

The Benefits of Comparing Mortgages

You might wonder, “Is it really worth the effort to compare mortgages?” 🤨

The answer is a resounding YES, and here’s why:

• Potential savings. By comparing mortgages, you could SAVE thousands of pounds over the life of your loan. Even a small difference in interest rates can add up to significant savings over time.
• Better understanding. The process of comparison helps you grasp the mortgage market better. You’ll learn about different types of mortgages, interest rates, and terms, making you a more informed borrower.
• Negotiating power. With the knowledge gleaned from your comparisons, you wield greater negotiating power with lenders. Showing that you’ve done your homework might just land you a better deal.
• Tailored fit. Not all mortgages are created equal. What works for one individual might not suit another. Comparison aids in finding the mortgage that aligns perfectly with your unique financial situation and goals.

Key Factors in Mortgage Comparison

Interest Rates: Fixed vs. Variable

Interest rates are perhaps the most crucial factor in determining the cost of your mortgage. You’ll typically encounter two types:

• Fixed rates – These remain the same for a set period, usually 2, 5, or 10 years. They offer stability and make budgeting easier, as your payments won’t change during the fixed period. However, you might miss out if interest rates fall.
• Variable rates – These can change over time, usually in line with the Bank of England base rate. They can offer lower initial rates, but there’s a risk that your payments could increase if interest rates rise.

When comparing, consider both the initial rate and how it might change over time. 

Loan Terms: Short-term vs. Long-term

The length of your mortgage term can have a significant impact on both your monthly payments and the total amount you’ll pay over time.

• Short-term mortgages (e.g., 15 years) – These typically have higher monthly payments but lower overall interest costs. You’ll be mortgage-free sooner, but you’ll have less disposable income each month.
• Long-term mortgages (e.g., 30 years) – These offer lower monthly payments, making them more affordable in the short term. However, you’ll pay more in interest over the life of the loan.

Use your mortgage comparison calculator to see how different term lengths affect your payments and total costs.

Fees and Closing Costs: What to Look For and Compare

Don’t forget about fees! 🤓

These can add significantly to the cost of your mortgage. Common fees to watch out for include:

• Arrangement fees – These can be substantial, sometimes several thousand pounds. Some lenders offer fee-free mortgages, but these often come with higher interest rates.
• Valuation fees – The cost of having the property valued.
• Legal fees – The cost of the legal work involved in buying a property and setting up the mortgage.
• Early repayment charge – These can be hefty if you want to pay off your mortgage early or remortgage before the end of your initial deal period.

When using a mortgage comparison calculator, make sure to include these fees in your calculations. 

A mortgage with a slightly higher interest rate but lower fees could work out cheaper overall.

Signs You Have the Right Mortgage Deal

So, how do you know when you’ve found the right mortgage deal? Here are some signs:

• It fits your budget. The monthly payments are comfortably within your means, leaving room for savings and other expenses.
• The terms suit your plans. If you’re planning to move in a few years, a shorter fixed-term might be better. If you’re settling for the long haul, a longer term could be more suitable.
• You understand all the terms. A good mortgage shouldn’t leave you confused. If you’re clear on all the terms and conditions, that’s a good sign.
• It’s competitive. While it doesn’t have to be the absolute cheapest on the market, it should be competitive based on your research and comparisons.
• You’re comfortable with the risk level. Whether it’s a fixed or variable rate, you should feel comfortable with the level of risk involved.

The Bottom Line

In the end, the right mortgage isn’t just about the numbers. It’s about what fits your financial goals and lifestyle.

Using a mortgage comparison calculator is a great first step in finding the right mortgage. It helps you quickly compare options and grasp the long-term effects of your choices.

But remember, a calculator is just a tool. It’s a good starting point, but not the only factor.

Consider your personal circumstances, plans, and risk tolerance. Don’t hesitate to seek advice from financial professionals for personalised guidance.

A good mortgage broker can help you find the best mortgage and competitive deals. They can also assist with the application process.

If you need a reliable broker, get in touch. We’ll connect you with a qualified mortgage advisor.