1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates fixed monthly payments for loans where payments include both principal and interest components. It's the standard calculation used by Kiwibank and other financial institutions for mortgage repayments.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal loan amount (NZD)
• \( R \) — Monthly interest rate (annual rate divided by 12, in 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: Understanding your EMI helps with financial planning, comparing loan offers, and determining affordability before committing to a mortgage.

4. Using the Calculator

Tips: Enter the principal amount in NZD, annual interest rate as a percentage (e.g., 5.5 for 5.5%), and loan tenure in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include Kiwibank's fees?
A: No, this calculates base repayment only. Additional fees may apply - check with Kiwibank for complete costs.

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

Q3: What's a typical Kiwibank mortgage rate?
A: Rates vary (3.5-7% as of 2024) based on loan type, term, and market conditions. Check Kiwibank's current rates.

Q4: Can I calculate fortnightly payments?
A: For fortnightly, divide monthly EMI by 2 and adjust tenure to # of fortnights (years × 26).

Q5: How accurate is this calculator?
A: It provides standard EMI estimates. Actual payments may vary slightly due to rounding or specific loan terms.