Mortgage calculators are used in determining the amount of mortgage or property that a person can afford. These calculators can also be used for comparing costs of several different loans and to calculate the impact of monthly or bi-weekly payments on the length of the mortgage. There are many variables that are taken into account when calculating the amount and affordability of a mortgage. A mortgage calculator is a tool that helps in determining the impact of changes in these variables on the cost and feasibility of the mortgage.

• Mortgage calculators can also be installed in Microsoft Excel and some websites offer a glimpse on how to make such calculators on an Excel sheet. Moreover, these calculators can also be found on financial calculators such as HP-12C. However the best way to calculate the mortgage is by using the internet that offers various mortgage calculators according to the needs of consumers or mortgagors.
• Before the inception of such mortgage calculators, compound interest calculation methods were used in order to determine the costs associated with the contract. However, nowadays, advancement in technology has made it easier for anyone to calculate the costs and expenditures involved in a mortgage by using these calculators. All it needs is a simple internet search and all the five main variables associated with the mortgage to be entered in the calculator.
• For example if a person borrows $250,000 at a 7% yearly interest rate and pay the loan back over thirty years, with $3,000 annual property tax expense, $1,500 annual property insurance expenditure and 0 .5% annual private mortgage insurance expense, then the amount to be paid monthly will roughly come up to $2142. The ease in calculating such parameters have made mortgage calculators ubiquitous and an indispensable tool in accurately determining the appropriate mortgage amount which is affordable.
• A simple calculation involving the principal, the number of monthly payments along with the interest rate can be fed into the Excel sheet. The multiplication of these three parameters will give the amount that is needed to be shelled out for the mortgage. However, there is no real need for creating such a program on an Excel sheet since many calculators are already available on the internet which can be used at free of cost.
• These calculators can also be used for determining how much interest will be paid by the mortgagor over the life of the mortgage. Actually the interest paid is nothing but the difference between the total payment amount and the loan principal. Therefore the interest I = cN-P where c is the fixed monthly payment, N is the number of payments and P is the principal. However in some countries such as the U.K, mortgagees calculations are not universal and there may be a significant difference between the figure offered by different mortgagors.
• The need for mortgage calculators is apparent and they are used by almost every mortgagor for calculating the feasibility of the contract. However these calculators do not and cannot take into account financial contingencies that can affect the contract in the future. Such abstract details can only be clarified by reading up about the various mortgages and seeking professional advice. Such advice coupled with the power of a mortgage calculator can be tremendously useful in determining the right type of mortgage which would prove to be a financially productive option.

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