A Home Loan amortisation calculator is a tool that calculates the total EMIs (Equated Monthly Installments) for your Home Loan and breaks them down into principal and interest components for each month of the loan term.

Here’s what it helps you do:

Understand Repayment Structure

With an amortisation schedule, you can see how much of your payment goes toward the principal and how much is interest.

Plan Your Finances

Amortisation calculators show the total interest payable over the loan tenure, helping you make strategic prepayment or refinance decisions.

Track Progress

Regularly reviewing your amortisation schedule lets you know exactly how much of your loan remains outstanding, keeping you informed and in control.

Save on Interest

It helps you identify opportunities to make extra payments or reduce the tenure of your loan, thereby saving significantly on total interest.

Amortisation involves splitting your Home Loan repayments into fixed instalments that cover both principal and interest over the loan tenure. Here's how it is calculated:

The Formula:

Home loan amortisation is calculated using the formula:

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

Where:

P is the principal loan amount.

R is the monthly interest rate (annual interest rate divided by 12).

N is the number of monthly instalments (loan tenure in months).

Step-by-Step Calculation:

- Determine the total loan amount (principal) and the interest rate applicable.

- Compute the monthly interest rate by dividing the annual interest rate by 12.

- Use the formula or an amortisation loan calculator to identify your monthly EMI.

- Break your total payment into principal and interest components for each month.

Amortisation Schedule:

The amortisation schedule shows how your EMI is applied:

In the initial months, a larger portion of the EMI goes toward interest, while a smaller fraction contributes to the principal repayment.

Over time, as the outstanding loan balance reduces, the principal portion increases, and the interest portion decreases.