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Instructions for the Mortgage Calculator

The calculator is split into three sections: 

1. Sliders - move the sliders to set the values of your principal, interest rate, loan length, and mortgage start date. 

2. Data display - use the buttons to choose how you want the output to be displayed: 

   • Amortization Graph - this shows how the total payment made each year is broken down. Note how the curves show increased principal and decreased interest being paid as time goes by. Also note that extra payments "push" up the principal curve, i.e. the annual principal amount shown is increased by the value of the extra payment. 

   • Amortization Table - how much interest and principal you pay each year.

   • Repayment Chart - the percentage breakdown of the total payments made over the entire mortgage (or indeed, the breakdown of the average monthly payment). 

   • Settings - doesn't quite fit in this section, but: 

     • Principal Amount - This setting allows you to set a smaller or larger principal range. 

     • Static/Dynamic - static means that the calculations are done only when you're finished dragging a slider; this is the default. If you have a particularly fast machine or web browser, you can use dynamic mode, where calculations are done as you move the slider. Be warned that on some browser/machine combinations, this can be too much for the Java virtual machine implementation, and can cause the browser to hang or crash.

     • Interest sliders - You can use either 1/8th increments or decimal places.

     • Amortization - The system used for calculating American monthly mortgage payments is the same or very similar to many other countries around the world. Canadian financial institutions use a slightly different formula.

     • Dollars/Pounds - This is purely cosmetic. It makes no difference to the calculations. 

3. Input Box 

   • Initial Loan Data - if you prefer not to use the sliders, you can enter data directly in this section. Values for the Tax and Insurance fields are simply divided by 12 and added to the monthly payment amount. On the right-hand side, the total interest paid over the entire mortgage is shown along with an estimate in real terms (i.e. in "today's money") given the figure for inflation entered in the subsequent section. 

   • Prepayment Data - this section gives you the opportunity to estimate how you can shorten the term of your mortgage by making either a single one-off payment or continuous extra monthly payments. On the right-hand side, the Savings field shows you how much money you will save, while the Real Savings field once again uses the inflation rate to give a rough estimate of what these savings are in real terms given that the interest savings are spread over a number of years. The Real Savings figure also tries to take into account the fact that payments that would have been made in the future would have cost less in real terms, thus reducing yet again the apparent amount saved. 

Important: When entering values into the "Input Box", make sure to press "Return" after you enter the last value. Using the TAB key will work on some browsers, and clicking the mouse over the next box is fine too, just make sure the last value you enter has been recognized by the calculator, and is being taken into account when calculations are made. 

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