How is a mortgage payment calculated?

The monthly payment uses the standard amortization formula: M = P × [i(1 + i)^n] / [(1 + i)^n − 1], where P is the principal (home price minus down payment), i is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). This is the same formula every commercial bank uses globally, including all Pakistani banks for conventional home loans.

How much is mortgage for a 50 lakh PKR home in Pakistan?

Worked example: 50 lakh PKR home (5,000,000) with 20 percent down payment (10 lakh) = 40 lakh loan. At HBFC's 14 percent over 20 years: monthly payment ≈ 49,750 PKR, total interest ≈ 79.4 lakh, total payback ≈ 119.4 lakh. Shortening to 15 years raises monthly to ≈ 53,200 PKR but cuts total interest to ≈ 55.8 lakh, a 23.6 lakh saving for accepting 3,450 PKR more per month.

What rates do Pakistani banks offer on home loans?

Rates fluctuate with KIBOR but typical ranges in early 2026: HBFC 12 to 16 percent (government-backed, longest tenure up to 25 years), HBL Home Loans KIBOR + 3 to 5 percent (variable, currently around 17 to 20 percent), MCB and UBL similar to HBL, Bank Alfalah and Standard Chartered SaadiQ around 16 to 19 percent. Always confirm the current quote since the State Bank policy rate moves these numbers.

Is there a halal alternative to a mortgage?

Yes. Diminishing Musharaka (used by Meezan Bank, Faysal Islamic Banking, BankIslami) is a partnership structure where the bank and customer co-own the property. The customer buys the bank's share gradually plus pays rent on the bank's remaining ownership share. Monthly cash outflow matches a conventional mortgage at the equivalent profit rate, but no riba is charged, so this calculator works for both conventional and Diminishing Musharaka planning by treating the rate field as profit rate.

What percent of salary should mortgage be?

The widely accepted rule is 28/36: housing costs (mortgage + property tax + insurance) should be under 28 percent of gross monthly income, and total debt (housing + car loan + credit cards) under 36 percent. Example: 200,000 PKR gross monthly → max 56,000 PKR housing, 72,000 PKR total debt. Pakistani banks themselves cap debt-burden ratio (DBR) at 40 to 50 percent for loan approval.

Does the calculator include property tax and insurance?

This calculator shows principal and interest (P&I) only. Pakistani buyers also need to budget: property registration fee 3 to 5 percent of home price (one-time), property tax 0.5 to 1 percent annually, takaful or insurance 0.3 to 0.5 percent annually, and bank processing fees 1 to 2 percent (one-time). Total ongoing costs add roughly 1 to 1.5 percent of home value per year on top of the P&I payment.

Should I choose a 15-year or 20-year mortgage?

A 15-year mortgage has higher monthly payments but significantly less total interest. For a 40 lakh loan at 14 percent: 15 years costs 24.4 lakh less in interest than 20 years, in exchange for paying 3,450 PKR more per month. Always pick the shortest tenure your monthly cash flow can sustain, your future self benefits enormously from the saved interest.

Is this mortgage calculator free?

Yes. No signup required. All calculations run entirely in your browser, your financial inputs (home price, salary, down payment) never leave your device or get sent to any server.

Mortgage Calculator

Home loan payments for PKR or USD with HBFC, conventional and Diminishing Musharaka math.

About the Mortgage Calculator

Calculate monthly mortgage payments, total interest and full amortization schedule using the standard reducing-balance formula. Built for Pakistani home buyers modelling HBFC (House Building Finance Company), HBL Home Loans, MCB Home Loans, Bank Alfalah and Standard Chartered Pakistan offerings. The same math also covers Sharia-compliant home financing, Diminishing Musharaka used by Meezan Bank, Faysal Islamic and BankIslami, where monthly payments follow the same pattern but the contract avoids riba. Pairs with our Mortgage Mistakes guide.

Mortgage Calculator

Currency:

Home price (₨)

Down payment (₨)

Annual interest rate (%)

Loan term (years)

Enter Home Price: input the total purchase price in your currency (PKR for Pakistani buyers, USD globally).
Down Payment: add your upfront payment amount. Pakistani banks typically require 15 to 25 percent down on conventional loans.
Annual Interest Rate or Profit Rate: enter the rate from your lender. HBFC currently quotes 12 to 16 percent, conventional banks KIBOR + 3 to 6 percent, Diminishing Musharaka 14 to 18 percent profit rate.
Loan Term: select 5, 10, 15, 20 or 25 years (HBFC max is 25 years. Commercial banks usually max at 20).
Calculate: see your monthly payment, loan amount, total interest or profit, and total payback across the life of the loan.

Frequently Asked Questions

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Mortgage Calculator

About the Mortgage Calculator

How to use the Mortgage Calculator

Frequently Asked Questions

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