For many individuals, taking out a mortgage is the only way to finance the purchase of a primary or secondary residence, but few are yet unaware that it is possible to enjoy a more advantageous monthly payment with little interest, as long as you make the right choice of establishment. Before choosing the lending organization then, it is important to calculate the monthly credit payment to take advantage of the best offer, but how do you do it?
Why calculate your mortgage?
Before starting, it should be remembered that there are different types of mortgage loans offered by banks, so the amount of monthly payments you will have to pay each month will therefore vary depending on the type of subscription and interest rates charged by the institution.
Carrying out this step will allow you to determine the amount deducted on repayment based on your income and the duration of the credit; the longer it is, the lower the monthly payments will be, but the total cost of the credit will increase at the same time. It is therefore essential to evaluate the monthly payments according to your borrowing capacity before signing the loan agreement.
The formula to calculate the fixed rate credit
Even if there are various types of credit, professionals often recommend a fixed rate loan as this will allow you to know, from the moment the contract is signed, the amount of monthly payments, which are generally invariable, and the total cost of the loan. Several elements are therefore taken into consideration in the calculation, namely the amount of credit, the duration of the loan or number of monthly payments and the annual interest rate.
Here is the formula to calculate the credit
Monthly payment = (borrowed capital x [annual rate/12])/ (1 – [1+ annual rate/12] – number of monthly payments)
If you don’t want to worry about all these numbers, you can use an online credit simulator to do the calculation for you.
How to use the comparators?
To make your life easier and avoid wasting time by comparing the different offers offered by credit institutions, there are tools on the web to quickly simulate a mortgage. This simulation platform gives you an overview of the monthly payment amount and loan term to help you make decisions.
To make sure you are not mistaken, do not hesitate to use several comparators to obtain more or less accurate results, since these simulators are generally free and easy to use.