The Honeymoon Calculator calculates total interest when a \"honeymoon\" or introductory home loan is taken compared with a variable interest rate loan over the full loan term. Honeymoon or introductory loans are usually taken for between six months and two years.Both calculations are performed at the repayment frequency entered (i.e. monthly, fortnightly or weekly), in respect of the original loan parameters entered, namely amount, annual variable rate and total term in years.
The Present Value provided by this calculator is displayed as the amount labelled 'Loan amount'. This estimate does not take into account any assumed change in the cost of living between the time of the preparation for the estimate provided or the future.
All months are assumed to be of equal length. In reality, many loans accrue on a daily basis leading to a varying number of days' interest dependent on the number of days in the particular month.
One year is assumed to contain exactly 52 weeks or 26 fortnights. This implicitly assumes that a year has 364 days rather than the actual 365 or 366.
In practice, repayments are rounded to at least the nearest cent. However the calculator uses the unrounded repayment to derive the amount of interest payable at points along the graph and in total over the full term of the loan. This assumption allows for a smooth graph and equal repayment amounts. Note that the final repayment after the increase in repayment amount will be a partial repayment as required to reduce the loan balance to zero.
The amount of the repayments at the start of the loan is determined based on the original loan term entered by the user. Similarly, the amount of the repayments to apply after the expiry of the \"honeymoon\" period is determined based on the remainder of the original loan term after deduction of the length of the \"honeymoon\" period. For example, if the entered values are original loan term 25 years and \"honeymoon\" period 2 years, then the remainder of the original loan term at the expiry of the \"honeymoon\" period is 23 years. This assumption may result in different amounts of total interest under the scenario of a combination of introductory and variable rates compared to the scenario of a variable rate only, even if the honeymoon entered is set equal to the variable rate.
The calculation of the amounts of interest under the two scenarios is rounded to the nearest dollar.
The interest rate input in the loan section of the calculator is a nominal interest rate per annum. The interest applied over each repayment period has been calculated as the nominal interest rate divided by the number of deposit periods.
The calculator assumes that interest is charged to the loan account at the same frequency as the repayments are made. In practice, there may be differences between the timing of the loan repayments and the timing of the interest charges being added to the loan balance.
" } }, "defaults": { "values": { "loanAmount": 100000, "loanTerm": 25, "honeymoonPeriod": 3, "honeymoonRate": 7.25, "variableRate": 7.5, "frequency": "month", "displayType": "GRAPH", "hasSaveFeature": true }, "controls": { "loanAmount": { "min": 500, "max": 5000000, "step": 100, "keyboard": false }, "loanTerm": { "min": 1, "max": 30, "step": 1, "keyboard": false }, "honeymoonPeriod": { "min": 1, "max": 3, "step": 1, "keyboard": false }, "honeymoonRate": { "min": 1, "max": 15, "step": 0.01, "keyboard": false }, "variableRate": { "min": 1, "max": 15, "step": 0.01, "keyboard": false }, "frequency": [ { "label": "Monthly", "value": "month" }, { "label": "Fortnightly", "value": "fortnight" }, { "label": "Weekly", "value": "week" } ] } } }; }(jQuery));