Category | Loan Term |
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Monthly Payment | |

Loan Amount | |

Total Interest | |

Total Cost of Loan |

## How To Calculate Your Home Loan Repayment in Johannesburg

In calculating your home loan repayment you need to understand the loan amount, interest rate, and loan term.

Let’s explore a method to compute this with an example.

**Step 1: Determine Loan Details**

First, establish the principal amount, the interest rate per annum, and the number of years for the loan.

For this example, imagine you have taken out a loan of R1,000,000 at an interest rate of 7% per annum for a period of 20 years.

**Step 2: Monthly Interest Rate**

Convert the annual interest rate to a monthly rate. Divide the annual rate by 12 (the number of months in a year). Monthly rate = 7% / 12 = 0.5833%

**Step 3: Total Loan Payments**

Calculate the monthly payments you will make over the loan term. Multiply the number of years by 12.

Total payments = 20 years * 12 months/year = 240 payments

**Step 4: Monthly Repayment Formula**

Use the formula for an annuity to calculate the monthly payment. The formula is: P = [rPV] / [1 – (1 + r)^-n] Where:

- P is the monthly payment
- r is the monthly interest rate (as a decimal)
- PV is the present value or principal amount of the loan
- n is the total number of payments

**Step 5: Apply the Formula**

Insert the values into the formula.

P = [0.005833 * 1,000,000] / [1 – (1 + 0.005833)^-240]

P = 5,833 / [1 – (1 + 0.005833)^-240]

P = 5,833 / [1 – (1.005833)^-240]

P = 5,833 / [1 – 0.3025]

P = 5,833 / 0.6975 P = 8,363.64

So, your monthly repayment would be approximately R8,363.64.

**Step 6: Confirm with an Amortization Schedule**

An amortization schedule can provide a detailed breakdown of each payment, showing how much goes towards the interest and how much towards the principal balance.

**Step 7: Adjust for Other Fees**

Remember to include any additional fees (like origination fees, insurance, and property taxes) that might be part of your monthly housing payment.

**Step 8: Double-check with a Mortgage Calculator**

Use an online mortgage calculator specific to South Africa for verification.

Input the same details to confirm the calculation.

**Example Summary**

You borrow R1,000,000 at a 7% yearly interest rate to be paid over 20 years.

Monthly installments come to approximately R8,363.64, excluding any additional fees.

It’s advisable to use an amortization schedule for a payment breakdown and confirm with an online calculator.