This 7 year mortgage calculator makes it easy to calculate how much your payments will be, what amount you’ll pay back in total, and also how much interest you’ll pay over the 7 year term of your mortgage.
Using The 7 year Mortgage Calculator
The easiest way to illustrate the use of the 7 year mortgage calculator is to work through an example.
In our example we are purchasing a property for 300,000 and we have a deposit, or down payment, of 100,000, so we need to borrow 200,000. Our bank is willing to lend us this money at an annual interest rate of 3.5% and the interest will be calculated and compounded monthly. The payments will also be paid monthly.
Our first step is to enter in the total purchase price of the property, in this case, 300,000.
Then we enter our deposit of 100,000, and the calculator automatically enters the mortgage amount we wish to borrow.
Next, we enter the annual interest rate at which the banks are willing to lend to us. Because we have a reasonable down payment, the banks have offered us an annual rate of 3.5%.
The next step is to choose, from the drop down list, how often the interest will be compounded. If you’re not sure, then just leave it at monthly as this is the usual compounding period.
What this means is that the banks apply interest to the loan on a monthly basis. It is approximately 1/12th of the annual rate. This matters to you because the more frequently the interest is compounded, the more often you pay interest on interest.
The final entry we need to make is to select how often we will make payments on the mortgage. Again, monthly is the usual frequency but you may pay bi-weekly, quarterly, or annually.
You will notice that there is no need to enter the term of the loan, as this calculator is for 7 year mortgages only.
After entering all our data into the 7 year mortgage calculator, the results are displayed below. The payment is shown, along with the total interest we will pay on the loan and the amount we will repay in total over the 7 year period of the mortgage.
In our case, we borrowed 200,000, repaying 225,789.49 in total over the 7 year term, of which, 25,789.49 of that was interest.