1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower makes to a lender each month for a mortgage loan. It consists of both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (RM)
• \( R \) — 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 the specified term, including both principal and interest.

3. Understanding Mortgage Payments

Details: In the early years of a mortgage, a larger portion of each payment goes toward interest. As the loan matures, more of each payment is applied to the principal.

4. Using the Calculator

Tips: Enter the loan amount in RM, annual interest rate in percentage, and loan tenure in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does interest rate affect my EMI?
A: Higher interest rates increase your EMI payment. A 1% increase can significantly impact your monthly payment over a long-term loan.

Q2: What happens if I make extra payments?
A: Additional payments reduce your principal faster, potentially saving you interest and shortening your loan term.

Q3: Are there other costs besides EMI?
A: Yes, mortgage loans often include processing fees, insurance, and other charges not reflected in the EMI calculation.

Q4: How accurate is this calculator?
A: This provides a good estimate, but actual payments may vary slightly due to rounding or specific bank policies.

Q5: Can I change my loan tenure after starting?
A: Some lenders allow tenure adjustments, but this may involve fees or require refinancing.