Buying a house is one of the most important decisions in an individual’s life, checking your home loan repayment via online home loan calculator is a great step towards making a well-weighed and informed decision. You can use this tool to adjust input parameters like loan amount and loan tenure to reach that perfect repayment quantum that suits your pocket. Feeding in some important parameters and clicking the ‘calculate’ button is all that its takes to know the estimated monthly repayment amount for your home loan.
This is how the home loan is been calculated :
The formula for Home Loan monthly repayment
You can try this formula to calculate your monthly repayments:
Monthly Repayment = P * [i/(1-((1+1)^-n))]
P = Loan Amount
i = monthly interest rate
n = loan duration in months
You could try replicating this formula using the following Excel function:
Monthly Repayment = PMT(i,n,-P)
Here is an amortization of home loan repayment to give you an insight on the loan repayment amount you will be paying to the bank, split year-wise. Consider a case where you have borrowed a sum of RM500,000 with a financing margin of 100%. That means you have made 0 down payment for the home. Say, your home loan has a tenure of 35 years and operates at an interest rate of 4.25% p.a.
Based on the information above, you have to make a monthly repayment of RM2,289.47. The table given below shows the repayment schedule with an outlook on what share of your repayment goes towards the principal and the interest components. You will also know the remaining balance at the end of each year.
Amortization refers to the process of paying off a loan or mortgage. An amortization table is a depiction of periodic payment details on a loan. This table generally illustrates the full summary of loan repayment, depicting the years against corresponding interest, principal payments made as well as the outstanding loan amount at each milestone.
Benefits of using repayment calculator for home loan
- Using the home loan calculator for checking your loan repayment plan and other related details, is a great way to ensure that you are well-informed and aware of all the related aspects of the loan before you decide to get your hands on one. Some of the most outstanding advantages of using an online calculator are –
- You get to know your tentative housing loan instalment beforehand; this enables you to plan your expenses more efficiently since you now know how much of your monthly income will go into loan repayment
- You can try varying your loan amount or loan tenure so as to reach that optimum monthly repayment amount which you know you will be comfortable to pay, each month. And you can then apply for that optimum blend of loan amount and tenure.
- You can easily check how much your monthly repayment is varying in case the processing charges are varied. This, though is not in a customer’s hand, but can lend you good knowledge in order to decide which bank to choose for availing a home loan.
Housing Loan Interest Rates Malaysia
MBSB Housing Loan- 4.75%
CIMB Housing Loan- 4.95%
Maybank Housing Loan- 4.65%
Public Bank Housing Loan- 3.65%
Bank Rakyat Housing Loan- 4.20% - 4.90%