1. What is the Mortgage Payment Formula?

The mortgage payment formula calculates the fixed monthly payment required to fully amortize a loan over its term. It's the standard calculation used by banks and financial institutions in India for home loans.

2. How Does the Calculator Work?

The calculator uses the mortgage payment formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of monthly payments (years × 12)
• \( PMT \) — Monthly payment amount (INR)

Explanation: The formula accounts for both principal repayment and interest charges, with the payment amount remaining constant throughout the loan term.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers understand their repayment obligations, compare loan offers, and plan their finances effectively when purchasing property in India.

4. Using the Calculator

Tips: Enter the principal amount in INR, annual interest rate (as offered by your bank), and loan term in years. The calculator will show your EMI and total repayment amount.

5. Frequently Asked Questions (FAQ)

Q1: What is EMI in home loans?
A: EMI stands for Equated Monthly Installment - the fixed payment amount you pay each month towards your home loan.

Q2: How is interest calculated on Indian home loans?
A: Most Indian banks use monthly reducing balance method, where interest is calculated on the outstanding principal each month.

Q3: What are typical home loan terms in India?
A: Most home loans in India have terms between 5-30 years, with 20 years being the most common.

Q4: Are there prepayment charges in India?
A: RBI guidelines prohibit prepayment charges on floating rate loans, but some banks may charge for fixed rate loan prepayment.

Q5: What factors affect home loan eligibility in India?
A: Income, credit score, property value, age, employment type, and existing liabilities all affect how much loan you can get.