1. What is the Home Loan Payment Formula?

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

2. How Does the Calculator Work?

The calculator uses the standard home loan formula:

Where:

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

Explanation: The formula calculates the fixed payment needed to fully amortize the loan over its term, accounting for compound interest.

3. Importance of Loan Calculation

Details: Accurate loan payment calculation helps borrowers understand their financial commitments, compare loan offers, and plan their budgets effectively.

4. Using the Calculator

Tips: Enter the 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 payment. Additional costs like insurance, taxes, or processing fees are not included.

Q2: What's the difference between reducing balance and flat rate?
A: This calculator uses reducing balance method (common in Malaysia), where interest is calculated on the outstanding balance each month.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms mean higher payments but less total interest.

Q4: What is a typical home loan rate in Malaysia?
A: Rates vary but typically range from 3% to 5% annually depending on market conditions and borrower's credit profile.

Q5: Can I calculate partial prepayments with this?
A: No, this calculates standard fixed payments. For prepayment scenarios, a more advanced calculator is needed.