The need for any type of financial assistance can come up at any given point in an individual’s life. An individual may require some funding for any situation such as financing your child’s higher education plan, wedding expenses, vacations, medical expenses but the individual would not have enough money in their savings account to handle such situations. In situations like these availing a loan against property may help to tackle these situations. The individual owning a piece of residential or commercial property can utilize the true potential of the property through a mortgage loan and generate funds through a hassle-free process.
In a mortgage loan, the customer will be provided with the loan amount by the financial institution. Customers will be provided with a percentage of a property’s value at a certain interest rate. The customer will need to make the repayments within a fixed tenure period. If the customer fails to make the repayment on time, the financial institution may charge heavy fees, or in worse conditions, they can also auction off the property in consideration, to retrieve the lost money.
A mortgage loan calculator will allow a customer to easily get the information about the monthly payments which is fixed on a fixed rate mortgage on a given amount, period of time and rate of interest.
A mortgage calculator will help a customer in calculating their Equated Monthly Installments (EMI) by using the data listed below:
- Tenure
- Rate of interest
- Loan amount
An important factor to consider before choosing the best Mortgage loan is the applicable EMI for the loan disbursed to the customer. Depending on the loan amount, the time period for making the repayments, and the interest rates, the EMI will be calculated and based on a customer’s personal finance. EMI can play a big role in the loan sanctioning. Even if a customer goes for fixed interest rates, the amount for transaction in the EMI amount will keep shifting. With the help of a mortgage loan calculator, a customer can easily choose the loan quotes and tenure, that offer the customer with easy repayment plans.
There are two types of interest rates on a mortgage loan:
- Fixed interest rate:
A fixed interest rate means that a customer will have to make the repayments with the interest rate that was used at the time of loan sanctioning throughout the tenure of the loan. This type is beneficial for customers who are going for a long-term loan.
- Floating interest rate:
This type of interest rate is not fixed, and it varies with the fluctuations of the market conditions. It is advantageous for
The formula used for calculating the EMI on mortgage is:
EMI = [P x R (1+R) N]/ [(1+R) N-1]
Where,
P: it is the principal amount, or the loan amount which has been availed.
R: represents rate of interest which is applicable on the loan
N: it represents the number of months for the repayment of the loan
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