Wednesday 05 July 2017

Mortgage calculator explained

Author: Editorial Team

Mortgage calculator

As Moneysupermarket says, “Few of us have the cash to buy a property outright, so taking out a mortgage is the most popular way to get onto – and move up – the housing ladder.” However, taking out a mortgage is a big decision, especially if you’re stretching your finances in order to afford the home of your dreams. The best way to work out if you can really afford your loan, and if you’re able to borrow enough to afford that house, is to use our mortgage calculator.

To help you get the most out of this useful online tool, here’s a quick run through of how it works and what all of the jargon and terminology mean for you.


In order for our online mortgage calculator to find the perfect product for your needs, we’ll need a little bit of information. The more accurate the information you can provide, the more useful the results will be to your mortgage research.

Mortgage Term

The mortgage term is the period of time it will take for you to pay off your loan in full. This can be as little as five years, or as much as 40, depending on your requirements and your finances. The longer your mortgage term, the lower your monthly repayments will be. However, it’s important to remember that longer terms will cost you more in interest, so make sure you get the balance right before you sign on the dotted line.

Initial Rate Period

If you are looking at fixed rates, the initial period is the amount of time your mortgage rate is fixed for after your repayments begin. Generally, the interest added to your loan during this period is significantly lower than the standard rate offered by most banks. A lot of buyers opt for two-year or five-year initial periods so that they know exactly how much they’ll be paying and can stay on top of their finances.

Reverting Rate

At the end of the initial rate period, you’ll be transferred to your lender’s reverting rate. This will increase the amount you have to pay back every month so it’s well worth considering a new rate at this point to secure a better deal.


In order to access low interest rates, you may have to pay a fee to your lender to arrange the loan. You’ll need to do some calculations to work out whether or not it’s worth paying the extra to reduce your monthly repayments.


Once our mortgage calculator has selected a choice of products that suit your needs, you’ll need to click on the ‘View’ link in the ‘Details’ column to find out more about each option. Here you’ll find information on the terms and conditions of the loan which should help you decide which option is right for you.

If you need advice about applying for a mortgage, or just want to find out more about the services we provide, explore our site, or get in touch with a member of our team today.

Please be aware that by clicking on to the above links you are leaving the Perception Finance Limited website. Please note that Perception Finance Limited are not responsible for the accuracy of the information contained within the linked site(s) accessible from this page


Written by: Editorial Team