Benefits of Using a Mortgage Loan Calculator | Kotak Mahindra Bank - Home Loan Stories

18 FEBRUARY, 2022

It is convenient when you have plans for everything. For example, it is easy to manage your money when you know your monthly income and the various expenses you need to pay for. Having a financial plan makes it easier to use your money judiciously. Similarly, when you take a mortgage, you must know how much you need to spend on it. A mortgage spans for at least a decade and, so, knowing your monthly payments can help you draw a plan of your monthly expenses for the entire tenure. A mortgage calculator can help.

If you are planning to avail a mortgage, read on to know about a mortgage calculator.

 

What is a mortgage calculator?

A mortgage calculator is an online computation tool that you can use to compute your EMI. With a mortgage calculator, you can calculate the value of the monthly installments you need to pay towards your mortgage loan. A mortgage calculator uses the loan details to give you accurate results every time. A mortgage calculator works on the following mathematical formula,

 

P x R x (1+R)^N / [(1+R)^N-1]

where:

P = Principal loan amount

N = Loan tenure in months

R = interest rate in months.

 

Following are the steps to use a mortgage calculator:

  • Visit the lender’s website and click on the mortgage calculator
  • Enter the loan amount, tenure and interest rate
  • You can alternately use the sliders to input the values
  • Your results will be displayed.

 

With a mortgage calculator, you can find your EMI, interest component and total repayment amount with just a click.

 

Advantages of a mortgage calculator

There are various benefits of a mortgage calculator. Read on:

 

  • It is available free and saves time

You can find a mortgage calculator on any aggregators or lenders’ websites for free. You can use it anytime and for any number of times to compute your results. Moreover, you need not do calculations manually and save your time. You can compare different combinations and then apply for the specific loan amount and tenure with the lender of your choice.

 

  • Gives clarity about the loan

By using the mortgage calculator, you can know the loan-related values at once. With this calculator, you can compute your entire repayment amount with the interest component. Once you know the bifurcation of the loan amount, you can determine a suitable tenure for yourself that gives you affordable EMI.

 

  • Helps you plan your finances better

A loan against property calculator helps you plan your finances better. You know about your EMI and interest component before applying. It helps you make your monthly budget and analyze it better. It also helps you know about your financial liabilities beforehand so that you can plan for them efficiently. Once you know the EMI, you can also decide on the prepayment as per your financial comfort.

 

With a mortgage calculator, you can know the amount you need to pay for the loan against property before you avail it. It can help you borrow the right loan amount at a suitable tenure. However, you must know that the results of the calculator are indicative and can be changed by the lender.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.