How Do I Calculate My Mortgage Payment?

The essential factors determining your mortgage payment are the loan amount, interest rate, loan tenure, and repayment structure. Mortgage payments are typically structured as Equated Monthly Instalments (EMIs), including the principal and interest components.

Banks commonly use this formula to derive the EMI:
EMI = P x R x (1+R)N / [(1+R)N-1]

Where,

• P is the loan amount.
• R is the monthly interest rate (yearly rate divided by 12)
• N is the total months (years x 12)

Steps to calculate EMI:

• Finalise loan amount as approved by the loan provider.
• Note down the annual interest rate offered.
• Choose the loan tenure in years.
• Input the above in the formula or online EMI calculator.

For example - For a ₹10 lakh loan at an 8% yearly rate with 10 year tenure:

• Loan Amount (P) = ₹10,00,000
• Monthly Interest (R) = 8%/12 = 0.0067
• Duration (N) = 10 x 12 = 120 months

Today, most loan providers offer free online EMI calculators that simplify estimating your monthly dues, which helps assess loan affordability.