Fill in the empty fields to see the result.
| Year | Interest paid | Principal | Balance |
|---|
Loan = price − down payment; payment by the annuity formula A = P × i / (1 − (1 + i)^−n). Bars: principal (yellow) and interest (grey) per year. Fees, insurance and rate changes are not included.
What the calculator shows
This mortgage calculator, also called a home loan or house loan calculator, works out a fixed monthly payment for a loan repaid in equal instalments. This is called an annuity loan. The inputs are filled with neutral sample values. Replace them with the figures from your own offer.
| Input | What it means |
|---|---|
| Property price | The agreed price of the house or flat |
| Down payment | The part you pay yourself. The rest is the loan amount (principal) |
| Interest rate | The annual rate the lender charges on the outstanding balance |
| Term | How long you repay the loan |
| Monthly income | Your net income, used for the affordability ratio |
| Result | What it means |
|---|---|
| Monthly payment | The fixed instalment that covers interest and principal |
| Total paid | All monthly payments added together |
| Total interest | Total paid minus the loan amount |
| Payment-to-income ratio | Monthly payment divided by monthly income |
| Amortisation chart | How each payment splits between interest and principal over the term |
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The formula
The mortgage payment calculator uses the standard annuity formula, written here in words:
- P is the loan amount: price minus down payment.
- r is the monthly rate: the annual rate divided by the number of months in a year.
- n is the number of monthly payments in the term.
- Δ is the total compound growth over the term. It is the fraction by which a balance would grow if it earned r every month for n months.
Monthly payment = P × r + (P × r ÷ Δ)
The first part, P × r, is the interest on the full loan in the first month. The second part is the amount of principal you would need to pay each month to clear the debt by the end of the term. If the rate is zero, the payment is simply P ÷ n.
Total paid is the monthly payment × n. Total interest is the total paid minus P.
How the amortisation chart works
Each month, interest is charged on the balance still owed. Early in the term the balance is large, so most of the payment is interest and only a small part reduces the principal. As the balance falls, the interest part shrinks and the principal part grows. The total payment stays the same throughout.
This has two practical effects:
- A longer term lowers the monthly payment but raises the total interest, often by a large amount. Change the term in the tool and compare the "Total interest" line.
- Early extra payments reduce the balance at the point where interest is highest. Check with your lender whether prepayment is allowed and what it costs.
Payment-to-income ratio
The ratio shows how much of your monthly income goes to the instalment. Lenders in Pakistan apply their own debt-burden limits, and these differ by bank and product. The tool does not judge whether a ratio is acceptable. It only shows the share. When you look at the result, count your other loans and regular costs as well, and keep in mind that income can change over a long term.
Rates in Pakistan: fixed, floating and Islamic financing
Many home financing products in Pakistan use a floating rate. A floating rate is a benchmark, usually KIBOR, plus the bank's margin, and it is reset at set intervals. KIBOR tends to move with the State Bank of Pakistan policy rate. The latest decision on our record is: SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC). For current figures, see SBP rates and economy.
The calculator assumes one rate for the whole term. With a floating-rate loan, your real payments will change at each reset. To see the effect, run the calculator again with a higher and a lower rate.
Islamic home financing, such as diminishing musharakah, uses rent and the purchase of ownership units instead of interest. The monthly figure is often calculated in a similar way, so the tool can give a rough comparison. The contract terms decide the actual amounts. See Islamic finance and Payments, tax, Islamic banking.
What the result does not include
The tool covers price, loan, rate and term only. A real offer may also include:
- processing and legal fees
- valuation charges
- property taxes and transfer costs
- insurance (takaful)
- penalties for late or early payment
Ask the lender for a full cost schedule and compare it with the calculator's total.
Related calculators
- Loan calculator: the same instalment logic for car and personal loans.
- Inflation calculator: what a fixed instalment is worth in future rupees.
- Savings goal calculator: how long it takes to save a down payment.
- Compound interest: how growth over time is calculated.
- Saving, Investing, Loans: all related guides.
Frequent questions
Is the monthly payment from the tool exactly what my bank will charge?
No. It is an estimate based on a fixed rate and equal payments. Bank fees, insurance, rate resets and the bank's rounding rules change the actual figure.
Why is the total interest so large on a long term?
Interest is charged on the outstanding balance every month. A longer term keeps the balance high for longer, so more interest builds up even though each payment is smaller.
Can I use it for a floating-rate (KIBOR-linked) home loan?
Yes, as a scenario tool. Enter the current rate, then repeat the calculation with higher and lower rates to see how the payment could change after a reset.
What income should I enter for the ratio?
Enter the net monthly income you can rely on. Using gross income or one-off earnings makes the ratio look lower than your real burden.
Does the calculator give financing advice?
No. It does arithmetic only. Decisions about a loan should be based on the lender's written terms and your full financial situation.