Frequently Asked Questions

Taxes, insurance, HOA, existing debts, rate, and term all consume the same housing budget. A 4.5× cap (UK) and a 28/36 DTI cap (US) can produce very different ceilings.

First-time buyers (FTB) have a Loan-to-Income (LTI) limit of 4.0× gross income and a 90% LTV limit (10% deposit). Second and subsequent buyers (SSB) have a 3.5× LTI limit and 90% LTV limit. Buy-to-let (BTL) has a 70% LTV limit. Lenders hold a 15% flexibility allowance.

A short-term loan (up to 18 months) allowing homeowners to purchase a new principal home before selling their existing property, with zero capital repayments required during the term.

In CA, AU, HK and similar markets you must be able to afford a higher hypothetical rate. We qualify the loan at that stress rate, then show the actual payment at today's rate.

No. Lenders also check credit, employment, property, and reserves. Treat the result as a planning ceiling.

Lowest total cost if you will keep the loan. Lowest payment if cash-flow is the constraint. APR is the fair rate comparison when fees differ.

Because the cheaper-looking rate charged points or large origination fees. Total cost and APR catch that.

Simple interest earns returns strictly on the principal initial deposit (I = P × r × t). For example, $100 invested at 10% for 2 years yields $20 simple interest. Compound interest earns returns on both initial principal and prior accumulated interest (A = P(1+r/n)^(nt)), generating $21 over 2 years. Over decades, compounding turns linear growth into an exponential curve.

The more frequently interest compounds (annually, quarterly, monthly, daily, or continuously), the higher the effective annual percentage yield (APY). For example, an 8.00% nominal rate produces 8.00% APY annually, 8.30% monthly, and 8.33% with daily or continuous compounding.

Continuous compounding represents the mathematical upper limit where compounding frequency approaches infinity. It utilizes Euler's constant e (approx. 2.71828) via the formula A = P · e^(rt).

The Rule of 72 is a quick mental math rule to estimate the years needed to double an investment: Years ≈ 72 / Annual Return Rate. At 8% interest, capital doubles in approximately 9 years (72 / 8 = 9).

Established by William Bengen and verified by the Trinity Study, the 4% rule indicates that withdrawing 4% of a diversified retirement portfolio in year one, adjusted for inflation thereafter, provides a 95%+ probability of funds lasting at least 30 years.

While nominal balance shows the raw dollar figure, inflation erodes real purchasing power. Using the Fisher equation (1 + r_nominal = (1 + r_real)(1 + i)), this calculator calculates both nominal and constant purchasing power in today's currency.

No. Extending the term can cut the payment and increase total interest. Watch interest savings, not only the monthly figure.

Include them if the promo ends inside the new term. A consolidation loan may lock in a higher rate than a temporary 0%.

Add origination or balance-transfer fees. If they wipe out interest savings, keep the separate loans or negotiate the fee.

To principal. Confirm the servicer applies it as a principal curtailment, not as a skipped future payment (pay-ahead).

Yes, because you make the equivalent of 13 monthly payments per year. The same extra amount as a dedicated extra-monthly payment produces a similar result.

A lump sum early in the term saves more interest than the same money later, because more of the balance is still outstanding.

No. Add fees and total interest. Two loans with the same payment can differ by thousands of dollars in APR and total cost.

You spread principal over more months, so each payment is smaller, but you sit in debt longer and interest accrues on a higher average balance.

Use APR when fees differ. Use the amortization schedule when you care about payoff date and extra payments.

Principal and interest, plus estimated property tax, home insurance, HOA, and PMI when LTV is above the threshold. That PITI figure is what lenders use for affordability.

This calculator removes PMI once the scheduled balance reaches 80% of the original purchase price. Servicers may also need an appraisal; rules vary by country and loan type.

Set an interest-only amount. That slice is charged interest only and remains as a balloon; the rest amortizes over the term.

When lifetime savings stay positive after costs and you will keep the loan past the break-even month. Dropping payment by stretching the term can look good monthly and still cost more overall.

It preserves cash but you pay interest on the fees. Compare both options; the cash-out / roll-in toggle does that.

Cash-out increases the new principal. The 'savings' then mix cheaper rate with a larger balance — read lifetime cost, not just the payment.

If the down payment would earn a high return, if you move before break-even, or if buy costs (tax, maintenance, selling costs) are high relative to rent.

A simplified deduction using your marginal tax rate is applied to interest. Caps, standard-deduction effects, and local tax treatment are not fully modelled.

Buyer net worth (home equity after selling costs) minus renter net worth (invested cash). Positive means buying is ahead in that year.