Calculating Mortgage

Repayments are made generally on a weekly or monthly basis as are the compounds of interest. The effect of the mortgage is that the initial payments make little change in amount owed as the interest has a greater effect, but as less money is owed the mortgage account drops much more rapidly.

In order to reduce you overall repayment you can make higher payments toward the beginning of your  mortgage. Sometimes when people get a windfall gain they use it make a repayment on their loan and find that it reduces their overall payments by a much greater amount. Factors to consider when deciding what repayments you can afford include:

o   What are your living costs. These include the costs of raising a family such as food, education, sports & leisure, hobbies, gifts, clothing, transport, medical, holidays, maintenance of house etc and other expenses

o   What money should you set aside for emergencies

o   Would you also like to save some money.

o   Are there other capital items or investments  you may like to purchase (eg a new car, stock market).

When considering a mortgage, taken into account should also be factors such as

o   your job security,

o   what sacrifices you may have to make in being able to keep paying the mortgage. But also you want to make sure the house is right for you.

o   Is the location convenient (schools, shopping, exercise habits), is the neighbourhood friendly and safe,

o   is it the right size for you and your family,

o   is it worth it’s cost, and does it feel right. 

o   likelihood of wanting to still be in that house till the payments are finished and

o   Alternately you may be purchasing the house so as to enter the property market and then upgrade as your family and your income grows