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Mortgage Calculator
Calculate your Loan amount for your Current property or Rental Income from the property
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The LAP can be used for a host of financial requirements ranging from managing wedding expenses, medical bills, purchasing another property, to even starting a business.
A mortgage calculator provides a detailed view of the loan EMI and amortisation schedule to make it easier for the borrowers to initiate the loan application process with confidence.
How Does a Mortgage Payment Work?
The loan amount and tenure primarily determine the monthly mortgage loan EMI. Just like other types of loans, the longer the mortgage loan tenure, the lower will be the monthly EMI. The monthly EMI has two main components- principal and interest.
Principal
A portion of every monthly instalment is reserved for repaying the principal balance or the amount taken as the mortgage loan. Just like other types of loans, the LAP loans are structured in a way that the principal component in the EMI starts low and continues to rise with time throughout the repayment tenure.
Interest
The interest rate at which the mortgage loan is taken also impacts the monthly EMIs. The higher the interest rate is, the higher will be the EMI amount. While the principal component starts low and then increases with time, the interest component is higher in the initial months of the loan and falls with time.
However, the EMI amount mostly remains the same throughout the loan tenure. Only the percentage of principal and interest component changes with time. The amortisation schedule generated by the mortgage loan EMI calculator can help borrowers understand this shift in detail.
How to Calculate the Loan Amount Using Mortgage Calculator?
The calculator will ask the borrower a few important details to provide him/her with the result-
- The Monthly Income
- The Monthly Expenses
- The Loan Tenure
- The Value of the Property
Once these details are entered, the calculator will inform the borrower about the loan amount he/she can receive.
Amortization Schedule Appearing in Loan Against Property Calculator
Illustration
Suppose if a borrower takes a LAP of Rs. 20 lakhs at 9% for 10 years. Using the mortgage calculator, the monthly EMI amount comes at Rs. 25,335. This EMI amount will remain the same throughout the loan tenure, unless any changes are made to the interest rate or if any amount is prepaid.
Here is the amortisation schedule example for the first 5 months-
| Month | EMI | Interest | Principal | Balance Principal After EMI Payment |
| 1 | Rs. 25,335 | Rs. 15,000 | Rs. 10,335 | Rs. 1,989,665 |
| 2 | Rs. 25,335 | Rs. 14,922 | Rs. 10,413 | Rs. 1,979252 |
| 3 | Rs. 25,335 | Rs. 14,844 | Rs. 10,491 | Rs. 1,968,761 |
| 4 | Rs. 25,335 | Rs. 14,766 | Rs. 10,569 | Rs. 1,958,192 |
| 1 | Rs. 25,335 | Rs. 14,686 | Rs. 10,649 | Rs. 1,947,543 |
*Disclaimer- This calculation is for illustrative purposes only.
As can be seen above, while the monthly EMI remains the same, the interest amount starts falling right from the first month, and the principal amount keeps rising. This continues until the end of the loan tenure when you finally repay the entire loan amount.
In other words, the ‘interest’ part is the highest in the first month of repayment and the lowest in the last month when the loan is fully repaid. On the other hand, the principal amount is lowest in the first month and the highest in the last month of the loan repayment.
Ways a Mortgage Calculator Can Help
A mortgage calculator is a powerful tool for those looking to secure a loan against their property. It helps by:
- Estimating Loan Eligibility: Quickly calculates the maximum loan amount based on income, expenses, and property value.
- Determining Monthly EMIs: Provides an estimate of the monthly payment, making budgeting easier.
- Understanding Interest Impact: Breaks down interest vs. principal repayment to help borrowers make informed decisions.
- Comparing Loan Offers: Allows users to compare different loan amounts, tenures, and interest rates to find the best deal.
- Planning Prepayments: Shows how making extra payments can reduce tenure or monthly EMI burden.
Get Detailed Amortization Schedule with Mortgage Calculator
Individuals wanting to apply for a Loan Against Property can always contact the lender to know more about the application process and understand the repayment schedule.
How to Use a Mortgage Calculator?
Using a mortgage calculator is simple and requires just a few inputs:
- Enter Monthly Income & Expenses: Helps determine repayment capacity.
- Set Loan Tenure: Choose a period between 1-30 years.
- Provide Property Value: The loan amount is generally a percentage of this value.
- Review Loan Amount & EMI: The calculator instantly provides the estimated loan amount and monthly EMI.
How to Lower Your Monthly Mortgage Payment
- Opt for a Longer Tenure: Spreading payments over more years reduces the monthly burden.
- Negotiate a Lower Interest Rate: A lower rate can significantly reduce EMI costs.
- Make a Larger Down Payment: A smaller loan amount means lower EMIs.
- Utilise Prepayment Options: Paying off a part of the loan early reduces the outstanding balance.
- Consider Loan Refinancing: Switching to a lower-interest lender can reduce overall costs.
How Does Home Credit Help You Save on Your Mortgage Payments?
However, any amount above the threshold limit of the account will be automatically transferred to the mortgage loan account to help reduce the outstanding amount. As the outstanding amount will fall, so will the total interest that the borrower will pay towards the loan.
Not only this, but the surplus amount available in the Home Credit account can be fully withdrawn by the borrower as and when required. So, even the emergency funds that one generally deposits in a savings account can be deposited into this Home Credit account as any surplus amount can be instantly withdrawn, just like any standard savings account.
Loan Against Property Prepayment Calculator
This facility is ideal in scenarios when a borrower has surplus money that can be paid to the lender. Once such lump sum payment is made, the borrower then has two options-
- Reduce the loan tenure and keep the EMI the same as before
- Reduce the EMI amount and keep the loan tenure the same as before
The mortgage loan calculator also has the option of calculating LAP prepayment to help borrowers understand how both of these options will impact their repayment schedule and EMI amount. The borrowers can also consult the lender to select the option that best meets their requirements.
Factors Affecting Loan Against Property EMI
Loan Amount
The total amount taken as a loan from the lender has a significant impact on the monthly EMIs. Higher loan amounts will result in higher monthly payments. Note that borrowers are only allowed to borrow up to 50%-60% of the cost of their pledged property as a LAP. The limit can vary between lenders and even on the basis of property type.
Loan Tenure
Even the tenure for which the LAP is taken will affect the EMI amount. Longer tenures have lower EMIs, and shorter tenures have higher EMIs. So, the EMI for a loan of Rs. 10 lakhs taken for 5 years will be higher than the Rs. 10 lakh loan taken for 10 years. A borrower should carefully select the tenure so that the EMI amount is affordable and can be conveniently paid every month.
Interest Rate
The interest rate at which the LAP is taken also has a crucial role in EMI calculation. So, if the loan amount and loan tenure is the same, the monthly EMI of the loan taken at a higher rate will be higher than the EMI of loan taken at a lower rate. The interest rate can vary between lenders. One should lookout for a reputable lender that offers LAP at competitive rates.
Mortgage Calculator FAQs (Frequently Asked Questions)
What is Loan Against Property EMI?
Loan against property EMI is a fixed amount that a borrower must pay until the loan amount is repaid. EMI stands for Equated Monthly Instalment. It consists of two parts-interest and principal.
How Does a Loan Against Property EMI Calculator Work?
Manually calculating loan against property EMI can be difficult. However, you can calculate the amount easily by using a loan against property calculator. You will have to enter details such as the principal amount, the interest rate, and the loan tenure. Once you enter these details, the calculator will provide you with the EMI amount.
How to Use A Property Loan EMI Calculator?
A property loan EMI calculator requires details like the principal amount, the interest rate, and the loan tenure. The calculator will calculate the EMI amount when you enter these details.
How is Principal and Interest Split in EMI?
An EMI consists of two parts-principal and interest. In the initial years, the interest part is higher. When a borrower starts paying EMIs, the interest is first paid. The interest part comes down to zero by the end of the loan tenure. Then, the EMI contributions go to the repayment of the remaining principal.
What is the Maximum Tenure for Which I Can Get a Property Loan?
The loan tenure ranges from 15-20 years.
What is the formula to calculate a mortgage?
The formula is: EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1], where P = Loan Amount, r = Monthly Interest Rate (Annual Interest Rate / 12 / 100), and n = Loan Tenure in Months.
What is the mortgage loan interest rate?
The mortgage loan interest rate is the percentage a lender charges on the loan. It varies based on factors like credit score, loan amount, tenure, and market conditions.
What is a good rate on a mortgage?
A good mortgage rate depends on market trends, but generally, a lower rate compared to the average and with favourable terms is considered good.
DisclaimerThe information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.