Most lenders dealing with mortgage loans have a free mortgage calculator on their sites that you can use to determine how much money you can afford to borrow. Most of them have specific criteria for the information you need to enter, such as your income, the total of your monthly payments, the amount of down payment you can afford to make, the lender’s interest rate and the length of the term of the mortgage.

These are the factors a lender will consider when you apply for a loan. By taking advantage of a mortgage calculator you will not suffer disappointment by applying for more money than the lender feels you can afford to repay. A general rule of thumb is that your mortgage payment should not be more than 40% of your income.

You do not have to scour the Internet or contact any lenders to find out what interest rate each one charges. This is usually pre-entered into the mortgage calculator on the site because it is for your use only. Any information you do enter will not be saved on the site, nor will the lender have access to it. You do not have to steer away from using this tool because you think that you will start getting calls from lenders wanting to offer you a loan.

Another benefit of using a mortgage calculator is that you can experiment with the numbers to find payment amounts and terms that suit your needs. If you enter $100,000, for example, you can then experiment with varying terms to find out how much you would pay each month and how quickly you could actually own the home free and clear.

You can also experiment with different payment options to find different ways of saving you money over the term of the mortgage. While most people choose to make their mortgage payment once a month, by making your payments on a bi-weekly basis, you can shave years off the term and save yourself a lot of money in interest.

Even though there is a stated interest rate included in online mortgage calculators, you may or may not receive this rate when you actually apply for a mortgage. Depending on your credit rating, you may be able to take advantage of the lowest rate a lender offers its best customers. On the other hand, if you have a poor credit rating you will be charged a higher rate of interest. The information you obtain from using such a calculator is for reference purposes only and does not mean that you will actually be approved for the mortgage.