Why do all mortgage calculators suck?
I”m currently in the process of buying my first home, so I am being exposed to the mortgage experience for the first time. While I expected a certain degree of suckage, I was quite surprised to see how shitty the available rent vs buy and mortgage payment calculators are.
In an age where most of the AJAX and server-side hardness is done for the web app developer by any of a number of different web frameworks, leaving development talent to focus on building value-added functionality, all the calculators I saw were nothing more than linkbait, a convenient excuse to display a huge block of AdSense ads.
This was even worse for rent/buy calculators, since the number of possible parameters is not nearly so standardized. For example, in order to decide if it’s cheaper to rent or buy, it’s necessary to know things like how much return you could get on your down payment if you invested it somewhere instead of buying a house with it. What number do I put down? 0%, assuming a savings account that pays no interest? 10%, the supposed rate of return for the stock market over long time periods (giggle)? What difference does it make?
The calculators should let you specify a range of values, and experiment with the results interactively to see how different assumptions impact the outcome. The calculators should pre-emptively try obvious alternatives, like using some of the down payment to pay points instead, or putting more or less money down. But they don’t do that. It’s as though the technology is stuck in the 80s.
I did run across a link on Reddit to a mortgage company offering $10,000 for the best mortgate calculator, but it turns out it’s a gimmick. They are effectively outsourcing the development of a new calculator for themselves, under very favorable terms. Everyone who enters must develop a solution with PHP and AJAX, it must run on RedHat linux, and in order to receive the $10k they must sign over all rights to the code. Pretty sweet deal.
I guess the reason there’s not been much innovation here is:
- Not much competition; everyone seems to suck the same.
- Not a directly profitable service, apart from ad placement. Since they all suck the same (see #1), it’s not something a lender has to distinguish itself, just a box to check.
I have a few ideas for a better way to solve the problem. Maybe I’ll even implement them someday.