1. What is the Home Loan Payment Formula?

The PMT formula calculates fixed monthly payments for a loan with a fixed interest rate. It's the standard calculation used by banks in Malaysia for conventional home loans.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

• \( P \) — Principal loan amount (RM)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (years × 12)
• \( PMT \) — Monthly payment amount (RM)

Explanation: The formula accounts for both principal repayment and interest charges, with more interest paid earlier in the loan term.

3. Understanding Malaysian Home Loans

Details: In Malaysia, home loans typically have terms of 10-35 years, with interest rates ranging from 3-6% depending on market conditions and borrower qualifications.

4. Using the Calculator

Tips: Enter loan amount in RM, annual interest rate in percentage, and loan term in years. The calculator will show monthly payment, total repayment, and total interest.

5. Frequently Asked Questions (FAQ)

Q1: Does this include other housing costs?
A: No, this calculates only the principal and interest. Additional costs like insurance, maintenance fees, and property taxes are not included.

Q2: What's the difference between conventional and Islamic loans?
A: Islamic loans use profit rates instead of interest, but the payment calculation is similar for comparison purposes.

Q3: How does BLR/BFR affect my payments?
A: If your rate is BLR + 1.5%, enter current BLR plus 1.5% as your annual rate. This calculator assumes fixed rates.

Q4: What if I make extra payments?
A: Extra payments reduce principal faster, saving interest. This calculator shows standard fixed payments only.

Q5: Are there prepayment penalties?
A: Some Malaysian banks charge for early settlement - check your loan agreement for details.