Using mortgage calculators

By MARY HOLM

Q: I noticed your reference to our calculators, at www.emortgage.co.nz, in your piece last Saturday.

Our calculator page remains our most popular page. A large number of visitors come in, use just the calculators, and leave.

We are finding that our refinancing calculator is really popular, as it shows how much borrowers can save at a lower variable rate.

We are surprised that our term reduction calculator is not used more.

A moderate level of increased payment can really bring the mortgage term down.

Nice try at a free ad for the second week in a row! And I'm giving it to you, as you make a couple of good points.

Your refinancing calculator shows, for instance, that if you switch a $200,000 25-year loan from 7.2 to 6.8 per cent, and it costs you $800 to refinance the loan, you will pay $51 less a month.

Or you could continue to pay that $51 extra. According to your term reduction calculator, you would then save $22,000 interest over the life of the loan, and pay it off in less than 23 years.

And if you could come up with $100 more, so that you paid $151 extra a month, you would save $53,000 and pay off the loan in less than 20 years. It's all good stuff.

One quirk of all the internet calculators I've used: don't put commas in amounts like $100,000. The calculators prefer $100000.

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