1. What is the Home Loan Repayment Formula?

The home loan repayment formula calculates the fixed monthly payment required to repay a loan over a specified term. This is the standard formula used by CommBank and most financial institutions in Malaysia and Australia.

2. How Does the Calculator Work?

The calculator uses the home loan repayment formula:

Where:

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

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

3. Importance of Loan Repayment Calculation

Details: Accurate repayment calculation helps borrowers understand their financial commitments, compare loan options, and budget effectively for home ownership.

4. Using the Calculator

Tips: Enter the principal amount in AUD, annual interest rate (typically 6.24% p.a. for CommBank Malaysia), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to CommBank Malaysia?
A: While it uses standard loan calculation methods, rates may vary. Current CommBank Malaysia rates are typically around 6.24% p.a.

Q2: Does this include other loan fees?
A: No, this calculates principal and interest only. Additional fees like application fees or mortgage insurance are not included.

Q3: How does changing the loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total interest.

Q4: Can I calculate fortnightly or weekly payments?
A: Yes, divide the monthly payment by 2 for fortnightly or by 4 for weekly (approximate).

Q5: Are there prepayment options with CommBank?
A: CommBank typically allows extra repayments, but conditions apply. Check with your lender for specific terms.