Home Loan Calculator Australia

Looking for a home loan calculator? You are probably wondering one of two things: how much you can borrow to buy your first home, or how much you can raise on your existing home to either upgrade your existing home, buy a new one or to fund your lifestyle. There are plenty of home loan calculators around - just make sure you find a specific Australian calculator because the calculations to vary slightly around the world. Loan calculators will basically calculate the amount that you will have to pay on a home mortgage based on the amount borrowed and the interest rate. Also you will need to define whether you are repaying on a principal and interest basis or an interest only loan.

There are several critical things you need to consider about a home loan before you get all excited about the figures coming out of a home loan calculators. Australia provides a number of grants for first home buyers and even more for low-income first home buyers. You could be eligible for tens of thousands of free dollars from your friendly state or federal government. Check this out first - free money from the government is not to be ignored and you might as well claim yours!

Home Loan Calculator Au

So what are the essential figures you need to be thinking about while playing around with an online loan calculator. Well first off make sure that you look at a range of options. You might be excited to find that you can borrow $100,000 more than you thought you could because the interest rates are low at the current time. But what if the interest rates go up? Check out what your repayments would be if the interest rate jumped 3%, 4% or even 5% more than the current floating rate. Are you still comfortable with the repayments. What if you lost your job or your partner did? Or you lost your regular over-time or that second job you have? Look at all the scenarios - not just he pleasant ones and decide how comfortable you are with them.

If you are nervous about interest rates than consider fixing rates - in Australia this is not as common as other places but a fixed rate is a guarantee - if the floating rate goes done you end up paying more than the going rate - that's your risk, but if the interest rates go up then you are of course happy because your rate is guaranteed for the length of the fixed rate period. You can fix rates for as short a period as 6 months or for as long as 5 years - even 10 years occasionally - but that does seem excessive. Note to that fixed rate loans are inflexible in terms of repaying the loan early (because you sold the house) or making extra repayments as you can afford them.

Another option - which many people do and ensures that you can have your cake and eat it to is to have a combination of fixed and floating rates for your loan. So say you want to borrow $400,000 you would float $100,000, and have fixed rate interest rate mortgages of $100,000 for periods of 2, 3 and 5 years. This gives you the best of both worlds - you are only exposes to interest rate fluctuations for 25% of your loan, but you still have the flexibility to pay lump sums of that part of the loan if you wasn't to. Its a little bit more paper works and setup hassle but it does mean that you have both the combination of flexibility and sleep and night security of knowing that 75% of your interest rates are fixed for a number of years.

Be wary of using your home loan like a cheap overdraft. Many Australians use a flexible lending facility which operates like a cheque account against their home. They can withdraw cash from their loan up to their limit for any reason: to fund an investment property, a boat, a European trip. The danger is of course that you still have to repay the loan sometime - and do you really want to risk your home for a holiday? Its these types of loans that are the reason that the stock market crash has seen many high-end properties on the market in major Australian cities. Their owners were using the home as a low-risk margin lending facility for their stock market portfolio. Yes you aren't exposed to margin calls but you are risking your family home - think before you take out this type of home loan and decide whether you have the fiscal discipline to handle it!