1. What is the Home Loan Payment Formula?

The home loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term. This formula is used by Security Bank Philippines and most other lenders to determine amortization payments.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: The formula accounts for both principal repayment and interest charges, with payments structured so that the loan is fully repaid by the end of the term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and ensures you can comfortably afford the loan. It also helps compare different loan offers.

4. Using the Calculator

Tips: Enter the principal amount in PHP, annual interest rate (without % sign), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What interest rate does Security Bank offer?
A: Rates vary based on loan amount, term, and borrower qualifications. Current rates typically range from 6% to 10% annually.

Q2: Are there other fees besides the monthly payment?
A: Yes, there may be processing fees, appraisal fees, and insurance requirements. Contact Security Bank for complete details.

Q3: Can I pay off my loan early?
A: Most Security Bank home loans allow early repayment, but check for any prepayment penalties.

Q4: How does the term length affect my payment?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total cost.

Q5: Is this calculator accurate for adjustable-rate loans?
A: No, this calculates fixed-rate loans only. Adjustable-rate loans have payments that change when interest rates adjust.