Using an interest only mortgage calculator
Interest only mortgage calculators tend to work in the following way:
- You would enter into the calculator the amount that you would like to borrow, the repayment period of your mortgage as well as the rate of interest
- The mortgage calculator would provide you with a figure that represents your monthly interest repayment for that particular mortgage deal.
Please be aware that the figure quoted on an interest only mortgage calculator is not inclusive of the additional payments that you should be making into an investment vehicle such as an ISA, a pension plan, or an endowment.
It must also be noted that an interest only mortgage calculator will not take account of variable interest rates, meaning that it might not be able to work out the long term costs of a variable rate mortgage. It could therefore be best to use an interest only mortgage calculator to give you a rough guide of how much the mortgage would cost.
When looking for an interest only mortgage, you may wish to consider the different types of interest rates available. These could include the following:
- Fixed rate - A fixed rate mortgage would have an interest rate that would be guaranteed to be of a certain amount for a set period.
- Tracker - Tracker interest rates follow the Bank of England base interest rate and could vary in accordance with this.