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Mortgage Calculator and Options
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Mortgage Calculator and Options
There are a number of options available and we can advise on which would better suit your requirements. These options include:
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PLEASE NOTE: The information and results provided by this calculator is intended to provide an illustrative example based on stated assumptions and your inputs. Results are meant as estimates only and you are advised to consult with Home Loan Advisers NZ.
Type of loans
There are lots of different home loan options available. Each has a different structure, fees and rates. The more common ones are:
This is the most common type of home loan. The payments remain constant for the term of the loan (subject to interest rate movements). Each payment includes Principal and interest with the proportion of principal increasing with each instalment. Can be on a variable, fixed or capped interest rate.
Principal payments are constant, while interest payments gradually reduce (subject to interest rate movements). Payments are higher at the start of the loan. Not common in New Zealand.
You pay only the interest. The fixed term is usually for a short period 1-5 years. Usually an interim measure, for example as bridging finance while another home is sold.
This is a bit like an overdraft. All your accounts are combined in one and you operate the loan within the agreed facility limit. They suit borrowers that are keen to take advantage of opportunities to apply all income to debt reduction in order to reduce the level of interest.
These products are aimed at the retired market and involve advancing an amount of money as either a lump sum or line of credit. Interest accrues on the advance but no repayments are required. The loan becomes repayable when the property is vacated or on death.
Types of Interest Rates
The rate can be varied by the lender at any time and is likely to change when the Reserve Bank alters the Official Cash Rate. This rate is great for people who need the flexibility to make lump sum payments, without being committed to specific terms and conditions.
This means an interest rate that will remain the same for the whole of the period for which it is accepted and agreed upon. There may be fees charged to repay the loan early.
Some people find this the best of both worlds-The advantage of a fixed rate but with the option of making lump sum payments to lower overall borrowings.