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Home Loan Calculator

A home or a housing loan is the amount of money borrowed from banks and companies for the purpose of purchasing a residential property. The borrower pays back the loan amount with interest in Equated Monthly Installments (EMIs) over a period that can range between 10-30 years depending on the type of the loan. With the help of a home loan calculator, users can get an estimate of home loan EMIs within minutes.

What Is Home Loan?

A home loan helps one buy a house on credit and repay the dues with interest over a duration that can stretch to 30 years in some cases. It is also widely known as a mortgage loan. For lenders, a home loan is a secured disbursal as the house becomes collateral in case of non-payment, default or foreclosures.

When applying for a home loan, you typically need to consider two factors: the amount you will need to borrow and the amount you will need to repay.

Banks and other lenders charge interest on the amount you borrow, so the amount you borrow will never equal the amount you must repay. This interest rate fluctuates from lender to lender and from one bank to another.

For borrowers, mortgages provide high-value loans with a long-term repayment option and the interest rates associated are comparatively reasonable. The repayment is in the form of equated monthly instalments (EMIs), including the principal and interest part of the loan.

Home Loan Schedule

A home loan schedule is the entire repayment plan, including the EMI amount and the repayment date, so that borrowers can plan their monthly budgets accordingly.

The amortisation table/schedule or a home loan schedule provides a full breakdown of the monthly interest payments for home loans. While the total amount of the periodic payment stays the same for each period, most lenders take a larger chunk of the interest component in the initial period and then increase the proportion of the principal in the EMIs. This information can be understood from the home loan schedule.

A home loan schedule is also important to understand the financial liability a borrower would take over a duration. Usually, a long period - anywhere between 5 years and 20 years - can sometimes run up to 30 years.

Benefits Of Using A Home Loan Calculator

A home loan calculator helps one understand and estimate the total cost of a home purchase, including interest over a period. In other words, it estimates the total cost of the house, EMIs, and the interest portion that will be paid. This information helps borrowers decide the tenure, the lender and plan the budget to make their dream of home ownership come true.

It is important to estimate and understand the financial liability one will get into over a long duration after taking up a home loan. The penalty of default, non-payment and foreclosure of a home loan is extremely high on the pockets.

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