Aya Bank Home Loan Calculator

Home Loan Repayment Formula:

\[ PMT = P \times \frac{r}{12} \times (1 + \frac{r}{12})^{12 \times t} \div [(1 + \frac{r}{12})^{12 \times t} - 1] \]

Monthly Payment (PMT):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Home Loan Repayment Formula?

The home loan repayment formula calculates the fixed monthly payment required to fully repay a mortgage over a specified term. This formula accounts for the principal amount, annual interest rate, and loan duration to determine consistent monthly payments.

2. How Does the Calculator Work?

The calculator uses the home loan repayment formula:

\[ PMT = P \times \frac{r}{12} \times (1 + \frac{r}{12})^{12 \times t} \div [(1 + \frac{r}{12})^{12 \times t} - 1] \]

Where:

\( PMT \) — Monthly payment (MMK)
\( P \) — Loan principal amount (MMK)
\( r \) — Annual interest rate (decimal)
\( t \) — Loan term in years

Explanation: The formula calculates the fixed monthly payment needed to pay off a mortgage over the loan term, accounting for both principal and interest components.

3. Importance of Loan Calculation

Details: Accurate loan calculation helps borrowers understand their financial commitment, plan their budget effectively, and compare different loan options to make informed borrowing decisions.

4. Using the Calculator

Tips: Enter the loan principal in MMK, annual interest rate as a percentage, and loan term in years. All values must be valid (principal > 0, interest rate > 0, term between 1-30 years).

5. Frequently Asked Questions (FAQ)

Q1: What is included in the monthly payment?
A: The monthly payment includes both principal repayment and interest charges. It may also include insurance and taxes if escrowed.

Q2: How does interest rate affect my payment?
A: Higher interest rates increase your monthly payment and total interest paid over the loan term.

Q3: Can I pay off my loan early?
A: Most loans allow early repayment, but check for any prepayment penalties in your loan agreement.

Q4: What is loan amortization?
A: Amortization is the process of gradually paying off your loan through regular payments, where early payments consist mostly of interest and later payments consist mostly of principal.

Q5: Are there other costs besides the monthly payment?
A: Yes, homeownership typically includes property taxes, insurance, maintenance costs, and possibly homeowners association fees.