1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates fixed monthly payments for Bank SA mortgages, combining both principal and interest components into a single payment amount.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal loan amount (AUD)
• \( R \) — Monthly interest rate (annual rate / 12, as decimal)
• \( N \) — Loan tenure in months

Explanation: The formula accounts for compound interest over the loan period, ensuring each payment reduces both principal and interest.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their repayment obligations, plan finances, and compare different loan options.

4. Using the Calculator

Tips: Enter principal in AUD, annual interest rate in percentage, and loan tenure in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include other loan fees?
A: No, this calculates only the principal and interest components. Other fees like application fees or insurance are not included.

Q2: How does changing the tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q3: What's the difference between fixed and variable rate calculations?
A: This calculator assumes a fixed rate. For variable rates, the calculation would change when rates adjust.

Q4: Can I calculate part-prepayments with this?
A: No, this calculates standard EMIs. Part-prepayments would require a more complex amortization schedule.

Q5: How accurate is this calculator?
A: It provides accurate estimates for standard loans, but actual bank calculations may include rounding differences.