1. What is the Home Loan Payment Formula?

The home loan payment formula calculates the fixed monthly payment required to repay a loan over a specified period, including both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard PMT formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Number of monthly payments

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that will completely pay off the loan by the end of the term.

3. Importance of PMT Calculation

Details: Calculating the exact monthly payment helps borrowers understand their financial commitment, compare loan offers, and budget effectively for home ownership.

4. Using the Calculator

Tips: Enter the loan amount in INR, monthly interest rate as a decimal (e.g., 0.01 for 1%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual rate to monthly rate?
A: Divide the annual percentage rate by 12 (months) and by 100 (to convert from percentage to decimal).

Q2: Does this include taxes and insurance?
A: No, this calculates only principal and interest. Your actual payment may include additional amounts for taxes and insurance.

Q3: What's a typical home loan term?
A: In India, home loans typically range from 5 to 30 years (60 to 360 months).

Q4: How does prepayment affect the loan?
A: Prepayments reduce principal faster, potentially saving interest and shortening the loan term.

Q5: What are current BOB home loan rates?
A: Rates vary; check Bank of Baroda's official website for current offerings based on loan amount and term.