1. What is the Home Loan Payment Formula?

The home loan payment formula calculates the fixed monthly payment required to repay a loan over its term. This is the standard formula used by banks in Malaysia for fixed-rate home loans.

2. How Does the Calculator Work?

The calculator uses the home loan payment formula:

Where:

• \( PMT \) — Monthly payment amount
• \( P \) — Principal loan amount (MYR)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of payments (loan term in years × 12)

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and financial planning. It also allows you to compare different loan offers and terms.

4. Using the Calculator

Tips: Enter loan amount in MYR, annual interest rate in percentage (e.g., 3.5 for 3.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical home loan term in Malaysia?
A: Most home loans in Malaysia have terms between 20-35 years, though shorter terms are available.

Q2: How does interest rate affect my payment?
A: Higher rates increase both monthly payments and total interest paid. Even a 0.5% difference can significantly impact your total cost.

Q3: What other costs should I consider?
A: Remember to factor in mortgage insurance, property insurance, maintenance costs, and potential rate increases for variable loans.

Q4: Can I reduce my total interest paid?
A: Yes, by making additional principal payments when possible or choosing a shorter loan term.

Q5: Are there prepayment penalties?
A: Some Malaysian banks charge prepayment penalties, especially in the early years of the loan. Check with your lender.