1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month for cash-out refinanced mortgages.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal loan amount
• \( R \) — Monthly interest rate (annual rate divided by 12)
• \( N \) — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over its term, including both principal and interest components.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their monthly obligations and plan their finances accordingly when considering cash-out refinancing options.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What's included in the EMI payment?
A: Each EMI payment includes both principal repayment and interest charges for that month.

Q2: How does interest rate affect EMI?
A: Higher interest rates result in higher EMI payments for the same principal and tenure.

Q3: What's better - longer or shorter loan tenure?
A: Shorter tenure means higher EMI but less total interest paid. Longer tenure means lower EMI but more total interest.

Q4: Can EMI change during the loan term?
A: For fixed-rate loans, EMI remains constant. For adjustable-rate mortgages, EMI may change when interest rates adjust.

Q5: Are there other costs besides EMI?
A: Yes, refinancing may involve closing costs, insurance, and taxes which aren't included in the EMI calculation.