1. What is the RBC Loan Payment Formula?

The RBC loan payment formula calculates fixed monthly payments for loans and mortgages in Canada. RBC (Royal Bank of Canada) offers competitive rates starting at 4.79% p.a. for mortgages.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term to calculate fixed monthly payments that fully amortize the loan.

3. Importance of Loan Payment Calculation

Details: Accurate payment calculation helps borrowers understand their financial commitments, compare loan options, and budget effectively for major purchases.

4. Using the Calculator

Tips: Enter principal amount in CAD, annual interest rate (RBC's current rates start at 4.79%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are RBC's current interest rates?
A: As of 2024, RBC's mortgage rates start at 4.79% p.a. for qualified borrowers, with personal loan rates typically higher.

Q2: Does this include insurance and taxes?
A: No, this calculates principal and interest only. Mortgage payments may also include property taxes and insurance.

Q3: How does payment frequency affect the calculation?
A: This calculator assumes monthly payments. More frequent payments can reduce total interest paid.

Q4: Are there prepayment options with RBC loans?
A: RBC typically allows annual prepayments of 10-20% of the original principal without penalty.

Q5: What's the difference between fixed and variable rate calculations?
A: This calculator assumes a fixed rate. Variable rate payments may change over time as rates fluctuate.