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 in Malaysia for fixed-rate home loans.

2. How Does the Calculator Work?

The calculator uses the home loan payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term, calculating the fixed payment needed to fully amortize the loan.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and comparing different loan options. It also shows the total interest cost over the loan term.

4. Using the Calculator

Tips: Enter the principal amount in MYR, annual interest rate in percentage, and loan term in years. All values must be valid (principal > 0, interest rate ≥ 0, term ≥ 1 year).

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. Variable rates would require different calculations.

Q3: How accurate is this calculator?
A: It provides accurate estimates for standard fixed-rate loans. Actual bank calculations may differ slightly due to rounding methods.

Q4: What's the maximum loan term in Malaysia?
A: Typically up to 35 years, but this varies by bank and borrower's age (usually must be repaid by age 65-70).

Q5: Can I calculate partial payments?
A: This calculator shows full amortization. For partial payments or early settlements, consult your bank for exact calculations.