1. What is the EMI Calculation?

The EMI (Equated Monthly Installment) calculation determines your fixed monthly payment for a 30-year refinanced mortgage. It includes both principal and interest components, calculated using Bankrate's methodology.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount ($)
• \( R \) — Monthly interest rate (annual rate ÷ 12, as decimal)
• \( 360 \) — Number of monthly payments (30 years)

Explanation: The formula accounts for compound interest over the loan term, distributing payments equally each month.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their monthly obligations and compare different refinancing options.

4. Using the Calculator

Tips: Enter the principal amount in dollars and annual interest rate in percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why use 360 months in the calculation?
A: 360 months represents the standard 30-year mortgage term, with payments calculated monthly.

Q2: Does this include taxes and insurance?
A: No, this calculates only principal and interest. Your actual payment may include escrow for taxes and insurance.

Q3: How does refinancing affect my EMI?
A: Refinancing at a lower rate reduces your EMI, while extending the term may lower payments but increase total interest.

Q4: What's the difference between APR and interest rate?
A: APR includes fees and other loan costs, while the interest rate is just the borrowing cost. Always compare APRs when refinancing.

Q5: Can I calculate EMI for other loan terms?
A: This calculator is specifically for 30-year terms. Different terms would require changing the number of months in the formula.