Mortgage Repayment Calculator With Lump Sum

New EMI Formula:

\[ \text{New EMI} = \frac{(B - L) \times r \times (1 + r)^m}{(1 + r)^m - 1} \]

Balance ($):

Lump Sum ($):

Monthly Rate (decimal):

Remaining Months:

New EMI ($/month):

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1. What is a Mortgage Repayment Calculator With Lump Sum?

Definition: This calculator determines the new monthly payment (EMI) after making a lump sum payment toward your mortgage principal.

Purpose: It helps homeowners understand how additional payments affect their monthly mortgage obligations.

2. How Does the Calculator Work?

The calculator uses the formula:

\[ \text{New EMI} = \frac{(B - L) \times r \times (1 + r)^m}{(1 + r)^m - 1} \]

Where:

$ B $ — Current mortgage balance ($)
$ L $ — Lump sum payment ($)
$ r $ — Monthly interest rate (decimal)
$ m $ — Remaining loan term (months)

Explanation: The formula recalculates the amortization schedule based on the reduced principal after the lump sum payment.

3. Importance of Lump Sum Mortgage Calculations

Details: Understanding the impact of extra payments helps in financial planning and can lead to significant interest savings over the loan term.

4. Using the Calculator

Tips: Enter your current mortgage balance, lump sum amount, monthly interest rate (divide APR by 12), and remaining months. All values must be valid (lump sum < balance).

5. Frequently Asked Questions (FAQ)

Q1: How does a lump sum payment affect my mortgage?
A: It reduces your principal, which can either lower your monthly payments or shorten your loan term.

Q2: What's a typical monthly mortgage rate?
A: For a 6% APR, the monthly rate would be 0.005 (6%/12). Adjust based on your actual rate.

Q3: Can I use this for other loans?
A: Yes, it works for any amortized loan (car loans, personal loans) with fixed payments.

Q4: Does this account for prepayment penalties?
A: No, check your loan terms for any penalties before making large extra payments.

Q5: Why doesn't my payment drop proportionally?
A: Mortgage payments are front-loaded with interest, so principal reductions have a non-linear effect.