Calculate your EMI, total interest payable, and explore prepayment savings. Plan your dream home with confidence.
| Period | Opening Balance | EMI | Interest | Principal | Closing Balance |
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Your home loan EMI is calculated using the formula: EMI = P × r × (1+r)^n / [(1+r)^n − 1], where P is the principal amount, r is the monthly interest rate, and n is the total number of monthly instalments. For example, on a ₹50 lakh loan at 8.5% for 20 years, each EMI works out to roughly ₹43,391. Even a small change in the interest rate — say 0.25% — can shift your total outflow by several lakhs over the full tenure.
Making part-prepayments directly reduces your outstanding principal, which means future EMIs carry a smaller interest component. A single prepayment of ₹2 lakh in the fifth year of a ₹40 lakh loan can save you over ₹5 lakh in total interest. Most banks allow unlimited prepayments on floating-rate loans without any penalty, so channelling bonuses or windfalls into your home loan is one of the smartest financial moves you can make.
A shorter tenure means higher EMIs but dramatically lower total interest. On a ₹60 lakh loan at 9%, choosing 15 years over 30 years saves you roughly ₹78 lakh in interest, even though the monthly EMI is about ₹22,000 higher. A good rule of thumb is to keep your EMI below 35-40% of your monthly take-home pay. If your income is expected to grow, start with a 20-year tenure and prepay aggressively.
Fixed-rate home loans give you predictable EMIs for the entire tenure but typically carry a premium of 1-2% over floating rates. Floating rates are linked to the RBI repo rate and move with market conditions, which means your EMI can go up or down. In a declining interest-rate cycle, floating rates work in your favour. Most borrowers in India opt for floating rates since they tend to be lower over the long run.
Under Section 24(b) of the Income Tax Act, you can claim a deduction of up to ₹2 lakh per year on the interest paid on a self-occupied home loan. The principal repayment qualifies for deduction under Section 80C, up to ₹1.5 lakh annually. First-time buyers may also benefit from Section 80EEA for affordable housing. These tax savings effectively reduce your net cost of borrowing, making home loans one of the most tax-efficient forms of debt in India.
EMI is calculated using the formula: EMI = P × r × (1+r)^n / [(1+r)^n - 1], where P is principal, r is monthly interest rate, and n is total months. Our calculator also shows the year-wise amortization schedule.
Banks recommend keeping total EMIs below 40-50% of net monthly income. For home loans specifically, the EMI should ideally not exceed 30-35% of your take-home salary.
You can reduce EMI by making a larger down payment, choosing a longer tenure, negotiating a lower interest rate, or making periodic prepayments to reduce the outstanding principal.
As of 2026, home loan rates range from 8.25% to 9.5% depending on the bank, loan amount, and borrower profile. SBI, HDFC, and ICICI typically offer rates starting around 8.25-8.5%.
If your home loan rate is below 8.5% and you're in the 30% tax bracket (claiming Section 24 and 80C benefits), investing in equity SIPs may give better post-tax returns. Otherwise, prepayment saves guaranteed interest.