1. What is the House Loan Payment Formula?

The house loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term, including principal and interest. It's the standard formula used by banks in Malaysia for conventional home loans.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that will completely pay off the loan by the end of the term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also shows the total interest cost over the loan term.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is the typical home loan term in Malaysia?
A: Most home loans in Malaysia have terms between 20-35 years, with maximum terms typically up to 35 years or until age 65-70.

Q2: What interest rates can I expect in Malaysia?
A: As of 2024, typical rates range from 3.5% to 4.5% for conventional loans, depending on the bank and your credit profile.

Q3: Does this include other housing costs?
A: No, this calculates only the principal and interest. It doesn't include insurance, maintenance fees, or property taxes.

Q4: Can I calculate for different payment frequencies?
A: This calculator assumes monthly payments. For bi-weekly or other frequencies, the formula would need adjustment.

Q5: How accurate is this calculator?
A: It provides a close estimate, but actual bank calculations may include slight variations in rounding or specific bank policies.