MoneySavingExpert Chair, Martin Lewis · Editor, Marcus Herbert

# What is the difference between these two mortage calculators?

4 replies 607 views
Forumite
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

## Replies

• Forumite
1.8K Posts
Forumite
Hi Hus

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:
• Forumite
3 Posts
Thank you very much for your kind help. I would also like to ask one final question if i may. Which one do you think gives the right answer and should be trusted? I would think the BBC's calculator is bad for the borrower, good for the bank. I'm not sure, i am just interested in what you would recommend?
• Forumite
1.8K Posts
Forumite
The fact is none of them are wrong and not to be trusted. They just calculate it in a different way. When chosing a mortgage, most brokers would say that a daily interest calculation is probably best.

regards
• Forumite
3 Posts
Thank you very much for kind help.
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