The Route Comparison figure is derived
as follows. Figure = Total Repayment Route Cost
less Total Investment Route Cost plus Future Fund
Value less Mortgage
Investment charges - these are based on a Legal & General
ISA. Actual charges in your own case may be different.
For mathematical purity the interest is calculated
on the basis of the twelfth root of the rate selected,
and the outstanding capital recalculated each month.
In practice mortgage maths is different in detail
and so do not expect these figures to match those
of any quote. (For example most lenders DO NOT recalculate
the outstanding capital balance with every payment,
for the simple reason that this gives them a higher
revenue.)
Mathematicians will note that surely, all other
things being equal, if the interest rate and investment
growth rate are the same, there should be no difference
between the two routes, whereas this calculator shows
that when these assumptions are made, the investment
route is always the most expensive. This is because
of the costs of investment.
It does not include insurance.
This calculator, and
the figures shown by it, are for illustrative purposes
only and should not be relied on. For more detailed
information based on your own circumstances, please
speak to your financial adviser.
Your home may be repossessed
if you do not keep up repayments on your mortgage. |
