If you've never had a mortgage before, the terms can seem confusing and overwhelming. Down payments, interest rates, the First Home Owners Grant, and other terms can all seem like a second language when you're first starting your home search. However, there's one distinct tool that can help you make sense out of your mortgage -- a house loan calculator. Learn the difference between a fixed or variable loan interest rate so you can determine which one is right for you.
How To Use A House Loan Calculator
Before you can determine which type of mortgage is right for you, you need to know how to use a house loan calculator. You'll need a few pieces of information to start -- mainly, the price of your home, any down payment that you have saved, and any funds that are coming from the First Home Owners Grant. It's also good to know your annual income and any standing monthly payments, such as car loans or credit cards.
About A Fixed Interest Rate
A fixed interest rate is good for homeowners who want a little bit of predictability every month with their mortgage. The rate is guaranteed to stay the same throughout a specific time period -- usually between one and five years. This is a great thing to have when mortgage rates are rising, but it can mean that homeowners pay more when rates drop. Once the terms end, the loan will default to an automatic variable rate, or homeowners can negotiate for another few years of a fixed interest rate.
About A Variable Interest Rate
The second type of rate is a variable interest rate. The rates will constantly adjust according to what's going on with local interest rates, which can mean your payment can change frequently. The majority of mortgages in Australia have variable interest rates.
If you're looking for a house loan calculator that can help you determine how much money you can comfortably spend on a home, please click here. Easystart Homes has an easy to use house loan calculator on its website.
If you'd like to learn more about Easystart Homes, please call 08 9333 0833.