A mortgage is a loan secured by real property. You pledge the home as collateral and repay the lender over a set term, typically 15–30 years.

What is a good debt-to-income ratio for a mortgage?

Most lenders prefer a DTI below 43%. A DTI under 36% is considered excellent and may qualify you for better rates.

Loan-to-Value (LTV) = Loan Amount / Home Value. A lower LTV (below 80%) typically gets better rates and avoids private mortgage insurance (PMI).

Should I choose a fixed or floating rate?

Fixed rates offer stability. Floating (adjustable) rates may start lower but carry risk if rates rise. Most homeowners prefer fixed for long-term security.

Mortgage Calculator

Calculate your monthly mortgage payment including principal & interest, property taxes, and home insurance.

Property Details

Formula

Monthly P&I = Loan × r × (1+r)^n / ((1+r)^n − 1) Total Monthly = P&I + Property Tax/12 + Insurance/12

Worked Example

A Rs. 10,000,000 home with a Rs. 2,000,000 down payment leaves an Rs. 8,000,000 loan. At 15% over 20 years the instalment is Rs. 105,343.17 a month; with the default 1% property tax and 0.5% insurance the monthly total is Rs. 117,843.17. Over 20 years the interest comes to Rs. 17,282,359.99, more than twice the amount borrowed.

How to Interpret the Result

Most home financing in Pakistan uses a variable rate linked to KIBOR, so the instalment changes when interest rates move. Run the calculator at a higher rate to check you could still afford it.

Common Mistakes

Budgeting only for the instalment, not property tax, insurance and maintenance. Assuming the rate stays fixed. Stretching the tenure to the maximum without seeing how much extra interest it costs.

Learn the Method

Free lessons that explain the ideas behind this calculator:

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Disclaimer: This tool is for educational and informational purposes only. Results are based on mathematical calculations and may not reflect actual financial outcomes. Always consult a certified financial advisor before making investment decisions.