In today’s fast-paced world, buying a home ensures mental peace, satisfaction, and financial stability. However, due to increasing property prices, most homebuyers secure a home loan to facilitate their home purchase. At the same time, many homeowners also use the value locked in their properties to navigate financially challenging periods. Loans against property or property loans are loans secured by pledging a residential or commercial property as security. Property loans are a huge responsibility and therefore, borrowers must secure these loans only after careful planning and when they know they can comfortably afford the loan EMIs. A mortgage loan calculator can help greatly with loan repayment planning. 

What is a Mortgage Loan Calculator? 

A mortgage loan calculator is an online tool that helps loan borrowers calculate their loan EMIs for home mortgage loans or loans against property. The calculator provides a clear breakdown of each equated monthly instalment or EMI, ensuring the borrower does not overextend their budget or borrow more than they can repay. 

Using the mortgage loan calculator is fairly easy. All one has to do is enter the mortgage loan interest rate they have been offered, the loan tenor that they wish to opt for, and the loan amount they plan to secure. The LTV ratio for mortgage loans can go as high as 70%, but homeowners must decide the loan amount keeping in mind their repayment capacity and income. Once these details go into the calculator, the LAP EMI calculator tool delivers the loan EMIs they will have to pay along with the total interest on the loan and the total cost of borrowing funds.

Steps to Use a Property Loan EMI Calculator 

Using a property loan EMI calculator is fairly straightforward. Most NBFCs and banks host this tool on their websites, allowing loan applicants to check different combinations of loan value and tenor and the resulting loan EMIs. Here’s how you can use a home loan EMI calculator: 

1. To start with, enter the loan amount you wish to borrow by pledging your property as security. 
2. During the next step, select the mortgage loan interest rate you have been offered. Mortgage loan interest rates can range from. 8.5% to 12% annually. Borrowers must always try their best to negotiate for the lowest mortgage loan interest rates possible. A low CIBIL score, low debt-to-income ratio, stable income and job, and 
3. Choose your loan tenor. Long-term loans are easier to repay but lead to unaffordable loan EMIs. On the other hand, short-term loans can easily become unaffordable. Therefore, it is important to select the right tenor — one that delivers affordable EMIs while keeping the total interest payout as low as possible. 

Let us understand the workings of a mortgage loan calculator with a simple example. Let’s assume you wish to borrow Rs.50 Lakh from a bank or NBFC by pledging your property as security. Let’s assume you were able to secure the loan at an 8% interest rate. If you feed these values into the calculator, the mortgage loan calculator will immediately tell you that your loan EMI for this combination would be Rs.47,782. If this EMI seems unaffordable, you can either increase the loan tenor or reduce the loan amount to arrive at an EMI value that you find affordable. All one needs to do to see the impact of change in the variables is to move the marker on the tab.

Benefits of a Mortgage Loan Calculator 

Here are some of the benefits associated with using a mortgage loan calculator. 

1. Mortgage loan calculators help borrowers save time and effort, by providing results within an instant. 
2. The mortgage loan calculator can be used to compare different loan offers and choose the right one for you.
3. Using a mortgage loan calculator, loan applicants can deduce their loan EMIs beforehand. This, in turn, can prove greatly helpful with loan repayment planning, allowing borrowers to manage their finances easily and budget for the loan EMIs. 
4. Lastly, the amortization schedule provided by the mortgage loan calculator can help loan applications figure out the most ideal time for making prepayments, ensuring maximum benefit.

To conclude, if you are planning to secure a mortgage loan, use a property loan EMI calculator to estimate EMIs, compare offers, plan repayments, and manage finances efficiently, ensuring affordability and easy repayment planning.