Mortgage Calculator

Mortgage EMI uses the reducing balance formula: EMI = P × r × (1+r)^n / [(1+r)^n - 1]. Here P is the loan principal (home price minus down payment), r is monthly interest rate (annual rate divided by 12 and then by 100), and n is total months. This formula ensures equal monthly payments while gradually shifting from interest-heavy to principal-heavy payments over time. Interest is calculated on the outstanding balance each month.

Shorter mortgage terms (10-15 years) have significantly higher monthly payments but save 40-60% on total interest compared to 30-year loans. For a $240,000 loan at 6.5%, a 15-year term costs about $2,091/month with $136,000 total interest, while a 30-year term costs $1,517/month but with $306,000 total interest. Choose based on your monthly budget and long-term financial goals. The 20-year term offers a balanced middle ground.

A 20% down payment is commonly recommended as it reduces your loan amount significantly, gives you instant equity, and often qualifies you for better interest rates. However, many lenders accept 5-15% down payments for first-time buyers. Larger down payments mean lower monthly EMIs and less total interest paid over the loan term. Calculate what works best for your financial situation using this calculator.

Amortization is the process of spreading loan payments over time. In early years, 70-80% of each EMI goes to interest because interest is calculated on the remaining balance. As balance decreases, more goes to principal. The amortization schedule shows this progression year by year, helping you understand when you'll build equity. Making extra payments early in the loan term saves more interest than later payments.