Mortgage calculator

The schedule below is the part worth reading. In the first year of a thirty-year loan at these rates, about 86 per cent of every payment is interest and the balance barely moves. That ratio flips just inside year twenty, so an extra payment made early is worth several made late. Term works on the same mechanism: fifteen years at the same rate costs less than half the interest of thirty, because the balance the interest is charged on falls away so much faster.

The deposit moves in bands, not on a dial

Lenders price loan-to-value in steps, so the useful question is which band a deposit lands in and not simply how large it is. The gap between 9% and 10% down can be worth more than the gap between 10% and 14%, because only the first one crosses a boundary. Twenty per cent is the step most buyers are aiming at: it is where mortgage insurance usually falls away and where the sharpest advertised rates start. Past that boundary extra cash still shrinks the loan, but it stops buying a better rate, and money beyond the band is often worth more kept liquid than sunk into equity.

The deposit is not the whole cash requirement

Transfer tax or stamp duty, legal fees, a survey, lender arrangement fees and the move itself commonly add two to five per cent of the price on top, and none of it can be borrowed on the mortgage. Someone who saves exactly the deposit figure and nothing more tends to find this out late and awkwardly, with contracts already moving. Budget the deposit and the fees as one number.

What this page shows is principal, interest and the escrow you type in. A lender quote will come out higher, because it prices in mortgage insurance below 20% down, origination costs and escrow set-up that this calculator knows nothing about. Treat the figure as a planning estimate and not as an offer.