How it is calculated
The fixed payment uses the standard declining-balance formula:
M = P × r(1+r)^n ÷ ((1+r)^n − 1)where P is the loan amount (price minus down payment), r the annual rate ÷ 12 and n the number of months.
Early payments are mostly interest; the principal share grows over time, as the schedule shows.
Worked example
A 1,000,000 home with 20% down (200,000) at 5% for 20 years: loan 800,000, r = 0.05 ÷ 12, n = 240. Monthly payment ≈ 5,280; total paid ≈ 1,267,100, of which about 467,100 is interest.
Frequently asked questions
Does it work for Islamic (murabaha) home finance?
If the bank quotes an annual profit rate on a declining balance, the maths is the same. If it quotes a flat rate on the original amount, use the loan calculator with "flat rate".
Shorter or longer term?
A longer term lowers the monthly payment but raises total interest a lot. Try both and compare.
Are insurance and fees included?
No. Add property and life insurance, registration and notary fees, which vary by country and bank.
How big should the down payment be?
Set by banks and local rules, typically 10–30%. A bigger down payment cuts both interest and the payment.
What is a debt-to-income limit?
Many banks cap total repayments at roughly a third of monthly income or a little more, depending on the country.