Generally speaking, we have no control over what interest rates will be. Government policy and the general state of the economy including the inflation rate will dictate the range of interest rates that will be available.

Still, when we go for a mortgage there are things in our credit history that can determine whether we will get a higher or lower interest rate than that of the normal market. Some of the things that determine whether or not we will get a favorable mortgage rate are:

. Our credit rating

. The length or term of the mortgage

. Timing (What the going rate is when we apply)

. How intensely we shop around, and

. Points paid at closing

**The power of getting the best rate**

While some of these things are determined mostly by how lucky we are, there are certain ways to save tens of thousands of dollars on your mortgage. Take the following example: You have found your bank will loan you $200,000 at the rate of 6% over a period of 360 payments, which is 30 years. With a mortgage calculator, it is determined the monthly payment for this loan will be $1,199.10. Also, it can be calculated over the course of this loan, you will have paid a total of $431,676.00 in principal and interest.

Another possible scenario is the same bank gives you an option to take a mortgage of $200,000 for a term of 240 payments, or 20 years at 5.5%. Here, a monthly mortgage calculator calculates the monthly payment to be $1,375.77. This means over the course of the 20-year mortgage you will have paid a total in principal and interest of $330,189.80.

**Calculate your way to savings**

You can easily see by taking the 20-year mortgage instead of the 30-year mortgage, you will have saved $100,000. Still, you decide paying $1,375.77 will not fit into your monthly budget. So, you continue your search for the right mortgage.

Another lender offers you a 30-year mortgage on a $200,000 principal. However, this lender will give you an interest rate of 5.5 % instead of the 6% you would have paid on the other 30-year mortgage. Going to the calculator, you'll find your monthly payment to be $1,135.50. Paying this mortgage in full for the 30-year term will cost $408,808.80.

So the difference between this 30-year loan and the other 30-year loan is a little more than $23,000. The only thing you did was look a little harder to find the right mortgage.

**Paying a little more each month**

Let's go one step further. You decide the first 30-year mortgage's monthly payment, $1,199.10, was an amount you could easily pay. So, you decide to pay this amount each month on the 5.5% mortgage. By doing this, you will have the mortgage paid in 26 years instead of 30. This will result in a savings of close to $30,000 over what you would have paid if you just made the $1,135.50 monthly payment.

Even more interesting is the fact you have already saved $23,000 because you've taken the lower rate. So, by taking the lower rate and paying the higher monthly payment, you will have saved a total of $53,000!

**The calculator arms you with important knowledge**

Without understanding and making use of the power of a mortgage calculator, a person normally ends up paying top dollar. However, with the combination of knowing just how much money is at stake and being a frugal shopper, tens of thousands of dollars can be saved.

In these examples, we used a mortgage calculator that calculates for monthly mortgage payments. Also, we used a calculator that determines the total amount paid over the full term of a mortgage. There is, however, an interest rate calculator that figures the interest rate when given the principal of the mortgage, the term of the mortgage and the monthly payment that will be made.

This is an important type of calculator to be familiar with because when you know how much money you need to borrow and how large of a monthly payment you qualify for, you can determine the mortgage rate you'll need to get.

Let's take this example: in order for a family to buy a new house they will need to be able to borrow $200,000. A 30-year term is all right for them and they have qualified to make a payment of $1,250 each month. By using an interest rate calculator, it is determined that they need to find a mortgage whose rates is no more than 6.392%.

With this knowledge, the potential borrowers have a predetermination of exactly what mortgage they will need to find. In this case, there's no doubt they'll find the right mortgage and will not be talked into taking one over their heads. This is another one of the powerful, money saving uses of a mortgage calculator.