What is the difference between these two mortage calculators?

3 Posts
Ok i have two mortgage calculator web sites.
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml#your_results
http://www.mortgages.co.uk/calculator/mortgage_calculator.html
When i input the same values, i get a different answer. The one from BBC is slightly higher. Is this because it uses compounding and the other one doesn't. I am just curious to find out. Any help is welcomed.
Example
Amount: £20,000
Repayment Period: 5 years
Interest Rate: 8%
BBC Result:
Repayment Mortgage: £417
Interest Only: £133.33
Mortgages.co.uk Result:
Repayment Mortgage: £405.53
Interest Only: £133.33
Thanks in advance,
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml#your_results
http://www.mortgages.co.uk/calculator/mortgage_calculator.html
When i input the same values, i get a different answer. The one from BBC is slightly higher. Is this because it uses compounding and the other one doesn't. I am just curious to find out. Any help is welcomed.
Example
Amount: £20,000
Repayment Period: 5 years
Interest Rate: 8%
BBC Result:
Repayment Mortgage: £417
Interest Only: £133.33
Mortgages.co.uk Result:
Repayment Mortgage: £405.53
Interest Only: £133.33
Thanks in advance,
0
This discussion has been closed.
Latest MSE News and Guides
Replies
The interest only figures are correct.
Repayment is a little more complex.
By my reckoning the BBC are calculating the interest on their calculator ANNUALLY which comes out at £417.42 by my calcs.
Mortgages.co.uk are calculating the interest MONTHLY. My calcs are £405.54.
Most lenders actually calculate the interest DAILY. This would equate to a monthly payment of £403.02.
If nothing else, it just goes to show that the headline interest rate is not the be all and end all of it ! Of course, any good broker would know this :beer:
regards