1. What is the Home Loan Payment Formula?

The home loan payment formula calculates the fixed monthly payment (PMT) required to repay a loan over a specified term. This is the standard formula used by banks and financial institutions 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 both principal repayment and interest charges, with more interest paid at the beginning of the loan term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also helps compare different loan offers.

4. Using the Calculator

Tips: Enter loan amount in MYR, annual interest rate (without % sign), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include other home loan fees?
A: No, this calculates only the principal and interest. Additional costs like insurance, processing fees, or stamp duty are not included.

Q2: Is this for fixed or variable rate loans?
A: This calculator assumes a fixed interest rate throughout the loan term.

Q3: How accurate is this calculator?
A: It provides accurate estimates for standard home loans, but actual bank calculations may vary slightly due to rounding methods.

Q4: What's the difference between reducing balance and flat rate?
A: This calculator uses reducing balance method (standard for home loans), where interest is calculated on the outstanding balance each month.

Q5: Can I calculate partial year terms?
A: This calculator uses whole years. For partial years, you would need to convert to total months.