About the Home Loan EMI Calculator
An EMI calculator works out the fixed monthly instalment that repays a loan with interest over its tenure. A home loan of ₹50,00,000 at 8.5% for 20 years costs ₹43,391 a month, and ₹54,13,879 in total interest.
How it is calculated
EMI = P × r × (1 + r)^n / ((1 + r)^n − 1)
- P is the loan amount.
- r is the monthly interest rate: the annual rate ÷ 12 ÷ 100.
- n is the tenure in months.
- Interest is charged on the reducing balance, so each EMI repays more principal than the one before.
Worked example
Inputs: ₹50,00,000 at 8.5% for 20 years.
Result: EMI ₹43,391 a month, total interest ₹54,13,879, total payment ₹1,04,13,879.
Rules and assumptions
- The rate you are offered depends on the lender, your credit score and income. The default here is only an example.
- Banks cannot charge a prepayment penalty on floating-rate loans taken by individuals for non-business purposes, under RBI rules.
- Under the old tax regime, interest on a self-occupied home loan is deductible up to ₹2 lakh a year under Section 24(b), and principal repayment counts towards the ₹1.5 lakh Section 80C limit. The new regime does not allow these for a self-occupied home.
Frequently asked questions
How is home loan EMI calculated?
EMI = P × r × (1 + r)^n / ((1 + r)^n − 1), where P is the loan amount, r the monthly interest rate (annual rate ÷ 12 ÷ 100) and n the number of months.
Why is most of my early EMI interest?
Interest is charged on the outstanding balance, which is highest at the start. As you repay principal, the interest part of each EMI falls and the principal part rises.
Does prepaying reduce my interest?
Yes. A prepayment cuts the outstanding balance, so all later interest is charged on a smaller amount. You can usually choose a lower EMI or a shorter tenure.
Is a longer tenure better?
A longer tenure lowers the EMI but raises the total interest you pay, often by a lot. Compare both in the calculator.