Home loan EMIs are a long-term commitment, making them a crucial factor in home buying. Paying down mortgage debt is done in equal monthly instalments or EMIs. Before applying for a mortgage loan, it’s essential to figure out how much your monthly EMI would be. The monthly payment for a house loan may be determined with the help of a reliable home loan EMI calculator. Then, you can be sure that it won’t significantly impact your budget.
What factors have the most significant influence on the EMI of a home loan?
- Loan amount: The amount you borrow from the bank to put down on the house is known as the “loan amount.”
- Interest Rate: The interest rate refers to the percentage of the loan amount your lender will earn each year.
- Tenure: The loan’s “tenure” indicates the number of years that it was taken out for.
Once you know these things, you can use the home loan EMI calculator to figure out how much your monthly payment will be. The calculator will also show you the annual amortisation schedule, which shows how the amounts to be paid back are split between the interest and the principal, and their balances over the loan tenure.
How to calculate home loan EMI?
The bank uses loan amount, interest rate, and loan term to determine your home loan EMI if you are approved for a mortgage. A house loan’s EMI is determined by dividing the total amount owed (principal plus interest) throughout the loan’s term by the number of months the loan was taken out. It is the amount of your equated monthly instalment.
Many factors, including the interest rate and loan term, will influence your home loan EMI. As a result, it’s crucial to keep abreast of the most current pricing structures and policies on the market. You can utilise a home loan EMI calculator to understand what your home loan instalments could look like. By doing so, you may choose the best loan deal and term for your needs.
The calculation for the monthly payment on a home loan is as follows:
E= [P x R x (1+R)^N]/[(1+R)^N-1]
E: Equated Monthly Instalment (EMI)
P: Loan Amount/Principal
R: Monthly Interest rate. (Payments of interest are made monthly by simply dividing the yearly interest rate by 12.)
N: Length of the loan throughout months
Say you have INR 50 lakh and want to buy a house. The bank has offered you a home loan for INR 40 lakh with an annual interest rate of 10.5% for 240 months or 20 years. If you use a home loan EMI calculator or the above formula to figure out your EMI, it will be INR 39,935 per month.
Suppose the annual percentage rate (APR) on your house loan is 11%. Your EMI will then be INR 41,288 per month. The interest rate affects how much interest you have to pay each month. This in turn affects how much your EMI is.
In the same way, if you choose to pay off your loan in 10 years instead of 20 years and the interest rate is 10.5 per cent, your monthly EMI will be INR 53,974. Because you will pay off the loan in less time, the amount you pay back each month will be higher.
Why should you use a calculator for your monthly mortgage payments?
A mortgage payment calculator is not a simple tool. Complex math calculations that must be done by hand can take hours and be boring for many of us. Figuring out your home loan EMI can be much easier if you use an online home loan EMI calculator.
- Facilitates Long-Term Preparation:
You may use this information to determine how much money you need to set aside each month to pay your mortgage. Using this method, you can better manage your finances and keep up with your payments.
- Transparent EMI amortisation schedule:
With this calculator, you can see exactly how much of the EMI goes to the principal. You can calculate the exact interest amount.
- Helpful for loan management:
If you have extra money and want to pay off your loan early, the home loan EMI calculator will tell you how it will help you save money on your monthly payments, save time, and save money on interest.
- The calculator is readily accessible:
The home loan EMI calculator is free to use, which makes it easy and convenient to figure out how much your home loan EMI is and when it’s due.
- Efficient, quick, and accurate:
Piramal Finance Home loan EMI calculator is easy to use and gives very accurate results. This is unlike manual calculations, which could be wrong because of human error.
- To evaluate loan deals:
You can use this calculator to compare loan offers from different banks. It will help you figure out the total amount (Principal Amount and Interest Amount) that needs to be paid back throughout the loan. This can help you decide which loan offer is best for you.
- Helps choose an appropriate term:
A home loan EMI calculator can assist you in determining the best home loan term. This is because it lets you see the monthly EMI amount for different loan terms to make a well-informed decision.
Choose Piramal Finance for accurate EMI home loan calculations
With the help of the Piramal Finance home loan EMI calculator, it’s easy to figure out your home loan EMI. The mortgage interest calculator will help you make an accurate decision about financing a home purchase. The EMI calculator can also help you make monthly plans for your money. Mortgage payments can be made monthly basis with a low-interest rate and an extended payment period.
Most people’s biggest concern about house loans is the monthly EMI payments. An EMI calculator helps you budget more precisely by breaking down your monthly EMI payments into their parts, regardless of the loan’s interest rate or length of the term.
To get the best house loan best suited to you, use our home loan EMI calculator to figure out what each lender is offering.