Home Loan Calculator
Please enter the following home loan information
Home Loan Repayment Schedule (monthly)
| Number of installments | Outstanding Principal (₹) | Principal Component (₹) | Interest Component (₹) | Repayment (₹) |
|---|
What is "Home Loan Calculator"?
The "Home Loan Calculator" is used to calculate monthly home loan repayments, total home loan interest expenses, home loan charts, and more without the need for MS Excel (spreadsheet).
Congratulations! The fact that you came to use the "Home Loan Calculator" means that you are preparing to buy a house! Unless you can pay the full amount at once, you will need a bank or financial institution. There are many banks or financial institutions that provide home loans and mortgage in the market, and no matter what kind of loan, the most important thing is the annual interest rate. How can you calculate the monthly repayment amount for a home loan based on the annual interest rate? There will be a detailed explanation below.
Home Loan Calculations Based on Annual Interest Rate
The formula for calculating home loan based on the annual interest rate is as follows:
- A represents the monthly repayment amount (or Equated Monthly Installment [EMI for short])
- P represents the home loan amount (how much money you borrowed)
- r represents the annual interest rate of the home loan (%) divided by 12, as there are twelve months in a year
- n represents the number of repayment months
If I borrowed a home loan of ₹5,000,000 from a bank with an annual interest rate of 2.5% and a repayment period of 20 years, then my monthly repayment amount would be:
Rule of 78
Home Loan borrowers should be careful not to assume that the principal amount repaid each month is the same! Regardless of whether the bank/financial institution uses the "straight-line method" or the "Rule of 78", the proportion of interest paid is higher at the beginning of the repayment. Therefore, if you choose to repay early, you need to pay attention to the remaining principal and any early repayment fees that may be incurred.
I will explain what the "Rule of 78" means.
The "Rule of 78" is derived as follows:
It is named after using a 12-month repayment period. How does 78 come about? Let's see follows:
That's it, the total interest for the entire period is divided into 78 parts. In the first month, you pay 12/78 of the interest, in the second month, you pay 11/78 of the interest, and so on. Therefore, the proportion of interest to principal in the monthly repayments is not consistent, with more interest paid at the beginning and less interest paid later.
Example:
If you borrow a home loan for period of 20 years:
Similarly, the total interest for a 20-years home loan will be divided into 28920 parts. In the first month, you pay 240/28920 of the interest, in the second month, you pay 239/28920 of the interest, and so on.
The calculation results from the "Home Loan Calculator" are for reference only. Before borrowing, you must first consult the relevant banks or financial institutions for accurate information!
Credit score rating in India
Credit score rating (CIBIL score) is very important when you borrow money, it is because if your credit score rating is too low, you may not be able to borrow money! For more information about credit score rating, please visit the below websites:
CIBIL Score - How to Check, Calculate and Improve Credit Score
CIBIL Score | Credit Score | Credit Report | Loan Solutions | CIBIL
List of banks in India
Other loan calculators in India: