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# Calculating Your Mortgage: Using a Loan Calculator

If you want to get a Loan Against Property, itâ€™s for residential or commercial properties and usually has lower interest rates compared to other loans. That is because these loans are secured against your property. That means if you fail to repay the EMI (Equated Monthly Installments) on time, the lender can seize the collateral property to recover their loss. As such, finding the loan with the lowest interest rate and calculating the EMIs using a mortgage loan calculator is important. It helps pay back the loan on time without stressing your finances.

## Why Is It Important to Calculate Your Mortgage?

Many people who need urgent funds borrow a loan against their property. The mortgage includes both the interest and the principal, which they must pay to the lender in monthly instalments during the loan term they select.

Calculating the mortgage payments helps determine whether you can actually afford to repay the EMIs. Here are a few reasons why it is important to calculate your mortgage:

• Plan the Finances Adequately: Calculating the mortgage helps plan out the finances according to your monthly budget and repayment capacity. Since a Loan Against Property has an extended repayment tenure of up to 15 years, having an estimate of your EMIs lets you allocate sufficient money towards them and other financial goals and expenses.
• Determine Your Affordability: Calculating the mortgage gives an idea of how much loan you can conveniently afford. The mortgage loan calculator computes the total loan cost with interest payment so you can better decide the loan amount which suits your need.

The primary objective of calculating the mortgage is to ensure that your monthly EMIs do not prevent you from meeting other financial goals and obligations. Can you fulfil other commitments with the new mortgage payments? Can you still save enough to build an emergency or retirement fund? Can you fit the new EMI comfortably into your monthly budget? If not, consider getting small loans online with a different term. If yes, a loan application will be the next step to take.

## Breakdown of the Monthly Mortgage Payment

Your monthly EMIs break down into three major financial components, including the following:

1. Principal Loan Amount You Borrow: The principal amount is the loan amount you borrow against your property.
2. Interest Rate: While the interest rate on your loan largely depends on the lenderâ€™s policy and market factors, loan companies also determine it based on your income, DTI ratio, credit history, and other external factors. Compare interest rates from various loan providers to get the best deal with the lowest interest rate. Even a slight difference in the interest rate can largely impact your EMIs and total loan cost.
3. Repayment Term: The repayment term is the period for which you distribute your repayment. A longer term means smaller EMIs but more interest payment, while a shorter term means larger payments but less interest payment. A mortgage loan calculator helps select a loan term with convenient EMIs.

## How to Calculate a Mortgage?

You may calculate the mortgage using any of these two ways:

Manual Calculation: This is the old-school method of calculating a mortgage using a mathematical equation. The formula to calculate the mortgage EMIs is as follows:

M = P [ I(1 + I)N ] / [ (1 + I)N âˆ’ 1]

The formula calculates mortgage payments based on the principal loan amount, interest rate, and repayment term. Here,

M = Monthly payments

P = Principal amount

I = Interest rate

N = Number of payments

You may use the formula to calculate the EMIs for various combinations manually.

Automatic Calculation: While the manual mortgage calculation is complex, time-consuming, and error-prone, an online mortgage loan calculator does the job automatically. Enter the principal amount, interest rate, and repayment term in months and get the EMI amount within a flash of a second. Due to its ease of use, you can use the calculator an endless number of times until you find a combination that works the best for you.

## What is the Mortgage Loan Calculator?

The mortgage loan calculator is an online utility tool that calculates the loan EMIs you must pay every month. Enter the loan amount, interest rate, and repayment tenure in the calculator to calculate the EMIs in seconds. The tool also shows the total loan cost and interest payment you must pay for borrowing the loan.

## Steps to Use a Mortgage Loan Calculator

A mortgage loan calculator is a simulation tool that computes monthly EMIs payable for a loan repayment. Follow these steps to calculate the EMIs:

• Open the calculator tool on the lenderâ€™s website.
• Enter the loan amount you wish to borrow.
• Enter the interest rate provided by the lender.
• Enter the repayment tenure in months.
• Click â€˜Calculateâ€™.

The calculator will instantly show the EMIs payable along with the total loan and interest cost. You can change the variables and recalculate the EMIs any number of times. With this information, you can choose a repayment plan with EMIs you can easily afford to pay, according to your repayment capacity. If you can afford more, reduce the loan tenure. Otherwise, choose a longer tenure to reduce the EMI amount.

A mortgage loan calculator helps calculate the EMIs in seconds when looking for small loans online. This information allows you to budget expenses to pay the EMIs and achieve other financial goals. The online tool is easy to use; you just need to enter a few variables to calculate the EMIs instantly. Moreover, you can use the EMIs from your home without any manual calculations.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader’s discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.

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