Understanding how your mortgage works is the key to getting it at the best available price. You know that what you will be paying will depend on the size of the mortgage, the number of years over which it is going to be repaid, and the interest rate applied. But how do all these factors interrelate and, if one changes, what happens to the other figures?

It is finding the answers to these fairly fundamental questions that makes a mortgage repayment calculator such an indispensable tool. Finding such a calculator is very simple – just key "mortgage repayment calculator" into your internet search engine and you will be presented with a wide range of websites hosting an easy-to-use calculator. An especially neat and straight forward calculator appears on the money pages of the Guardian newspaper. Not only does this particular version distinguish between repayment and interest-only mortgages, but also lists the remaining mortgage balance you still owe after a given number of years, together with the amount of interest you will have paid by each year.

Using mortgage repayment calculators is simplicity itself. There will be one box in which you fill in the size of the mortgage you want to borrow. A second box will invite you to indicate the number of years over which the mortgage is to be repaid and a third box will ask for the applicable interest rate.

The resulting calculation will show you what the monthly repayments will be, the total sum of interest that you will need to pay over the term of the mortgage and (with most calculators) the balance outstanding on the mortgage over successive years.

The calculators are completely free to use, so can be experimented with as often as you like and until you are entirely comfortable with what information needs to be input and just what the results have to tell you.

There is something of a thrill in seeing the figures emerge so easily and quickly from the mortgage repayment calculator, since the sums involved are really quite complicated. With repayment mortgages, for example, they need to take into account that you will be paying interest on a diminishing outstanding mortgage balance, yet also that the interest payable needs to be "compounded" (outstanding interest due needs to be added back to the diminishing balance of the principal, because you will in effect be paying interest on the interest). Payments on interest-only mortgages, of course, are a lot easier to calculate – involving the multiplication of the amount borrowed, by the number of years, by the interest paid.

The mortgage repayment calculator really comes into its own, of course, when you have some serious decisions to make about your mortgage. If it is your first, then you will want to know down to the last penny just how much the monthly repayments will be for the interest rate you are quoted. You may also probably want to compare the shorter- and longer-term costs of a repayment mortgage against an interest only mortgage. The calculator will help you compare the offers available from competing mortgage lenders. If you already have a mortgage, you might be interested in the effects of any rise or reduction in interest rate. Would a remortgage be a sensible offer? Again, the mortgage repayment calculator will be an indispensable tool in helping you decide.