Home Loan Calculator
Home Loan Calculator
Purchasing a house could be one of the biggest investments in the lives of many individuals.
The cost of real estate in India is so high that many individuals buy or built their first homes by taking home loans.
Home loans allow you to buy a real estate with minimum initial capital and a regular monthly EMI that can be paid for as long as 20 years or more.
How does the Home Loan Calculator work?
In order to use the home loan calculator, one should know the following terms:
Principal is the actual amount that an individual has borrowed for the purchase of a real estate property.
Rate of Interest is the interest percentage charged on the total principal by the lender for the amount borrowed. For calculating EMIs, we should make sure that the rate of interest is used in formula on a monthly basis.
Number of installments are the total number of monthly EMI’s you would pay for the entire loan tenure. For example: If loan tenure is 5 years, then the number of monthly installments would be 5 X 12 months = 60.
Home Loan EMI is the regular monthly payment that an individual has to pay to the lender for the home loan. It is a sum of part of total principal and part of your total interest which is equated to monthly installments.
Total Liability is the total of Principal and Interest.
Formulas:
E = P*r* [(1+r)n / {(1+r)n-1}]
A = E*n
Example:
Assume you borrow Rs 1000000 at an interest of 5% for 10 years.
Home Loan EMI = 1000000*5/12* [(1+5/12)120 / {(1+5/12)120-1}] = Rs. 10607
Total Liability = 10607 * 120 = Rs. 1272840
Why should you use a Home Loan Calculator online?
Using the Home Loan Calculator online helps you in making a financial decision on whether to take a loan or not? on a real-time basis. Thus, helping you grab an opportunity quickly.
Advantages of using a Home Loan Calculator:
Listed below are few advantages of using a Home Loan Calculator:
The Home Loan Calculator helps you in calculating the EMI, interest and total liability irrespective of the currency denomination, that is, you can use it for calculation of money in INR, USD, JPY, EUR or any currency of your choice.
A Home Loan Calculator helps you in making decisions quickly that is because you can compare the various loan providers on parameters like Principal, Tenure or Interest Rate on a real time basis.
The Home Loan Calculator does all the mathematics functions online with few inputs on your end. No coding or doing the maths is needed, this makes it easy to operate.
You can get the monthly EMI amounts for a home loan, which helps in making a good financial budget.
Note-
The above calculator uses a Fixed Interest rate for calculation of your loan EMI.
For Floating Interest rate loans its best to calculate your loan EMIs with three main factors:
- If Interest rate goes down. How much can it go?
- If interest rate goes up. How much can it go?
- If the interest rate is same throughout loan period.
Having your EMI calculated with the above 3 factors in mind will help you in knowing the max pain in a high interest rate scenario which is more critical in financial planning then a lower interest rate scenario.
A successful Financial plan focuses more on max pain so that the worst can be dealt with proper planning.
A lower interest rate scenario would be a cherry on top of your financial plan.