The calculation for monthly home loan repayment is different than the hire purchase or personal loans. It is based on principle loan balance (reducing balance) instead of total loan, which normally used in hire purchase or personal loan.
The advantage of principal loan balance over total loan is the total interest (profit) paid to the bank getting lesser as times go by.
For those who like to calculate the monthly home loan repayment on your own, you may use the following formula,
Alternatively, you may want to use an online home loan calculator.
Formula for Monthly Repayment
P = Loan Amount
i = monthly interest rate
n = loan duration in months
In Microsoft Excel, there is a function on how to calculate home loan monthly repayment easily. Just use the following function
If you find it is tedious to calculate on your own you can use an online home loan calculator. In the online calculator, there are additional information given such as outstanding & principal loan balance. You may need this figures for an early loan settlement.