1. What is Total Interest Calculation?

Total interest calculation determines how much interest is paid over the entire duration of a mortgage loan. It represents the additional cost beyond the principal amount borrowed.

2. How Does the Calculator Work?

The calculator uses the total interest formula:

Where:

• \( EMI \) — Equated Monthly Installment (monthly payment)
• \( m \) — Total number of months in loan term
• \( P \) — Principal loan amount

Explanation: The formula calculates the total amount paid over the loan term and subtracts the original principal to determine the interest cost.

3. Importance of Total Interest Calculation

Details: Understanding total interest helps borrowers compare loan options, make informed financial decisions, and appreciate the true cost of borrowing over time.

4. Using the Calculator

Tips: Enter the monthly EMI payment, total number of months in the loan term, and the principal amount. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why is total interest important for mortgage planning?
A: It shows the actual cost of borrowing and helps compare different loan terms and interest rates to find the most cost-effective option.

Q2: How does loan term affect total interest paid?
A: Longer loan terms typically result in higher total interest paid, even if monthly payments are lower, due to interest compounding over more periods.

Q3: Can I reduce total interest paid on my mortgage?
A: Yes, by making extra payments, choosing a shorter loan term, or refinancing to a lower interest rate when available.

Q4: What's the difference between interest rate and total interest?
A: Interest rate is the percentage charged on the principal, while total interest is the actual dollar amount paid over the entire loan term.

Q5: Does this calculation work for all types of loans?
A: This formula works for fixed-rate amortizing loans where EMI remains constant throughout the loan term.