Mortgage Repayment Calculator Interest Rate Change

Mortgage Repayment Formula:

\[ New\_EMI = remaining\_P \times \frac{new\_r \times (1 + new\_r)^{remaining\_n}}{(1 + new\_r)^{remaining\_n} - 1} \]

Remaining Principal (remaining_P):

currency

New Monthly Rate (new_r):

decimal

Remaining Months (remaining_n):

integer

New Monthly Installment (New_EMI):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Mortgage Repayment Calculator?

The Mortgage Repayment Calculator estimates the new monthly installment amount after an interest rate change, based on the remaining principal, new monthly interest rate, and remaining loan term.

2. How Does the Calculator Work?

The calculator uses the mortgage repayment formula:

\[ New\_EMI = remaining\_P \times \frac{new\_r \times (1 + new\_r)^{remaining\_n}}{(1 + new\_r)^{remaining\_n} - 1} \]

Where:

\( remaining\_P \) — Remaining principal amount (currency)
\( new\_r \) — New monthly interest rate (decimal)
\( remaining\_n \) — Remaining number of months (integer)

Explanation: The formula calculates the new equated monthly installment (EMI) after an interest rate change, taking into account the remaining loan balance and term.

3. Importance of Mortgage Repayment Calculation

Details: Accurate mortgage repayment calculation is crucial for financial planning, budgeting, and understanding the impact of interest rate changes on monthly payments.

4. Using the Calculator

Tips: Enter the remaining principal in currency, new monthly rate as a decimal (e.g., 0.005 for 0.5%), and remaining months as an integer. All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: How is the monthly interest rate calculated from annual rate?
A: Divide the annual interest rate by 12 (months). For example, 6% annual rate = 0.06/12 = 0.005 monthly rate.

Q2: What happens if interest rates increase?
A: Higher interest rates typically result in higher monthly payments for the same remaining principal and term.

Q3: Can this calculator be used for other types of loans?
A: Yes, this formula applies to any amortizing loan with fixed monthly payments, including car loans and personal loans.

Q4: How does the remaining loan term affect the new EMI?
A: Shorter remaining terms generally result in higher monthly payments, while longer terms spread the payments out more.

Q5: What if I want to keep the same monthly payment after a rate change?
A: You may need to extend the loan term or make a lump sum payment to reduce the principal to maintain the same EMI.