Home loan EMI calculator

How the EMI is worked out

An equated monthly instalment keeps your payment constant while the split between interest and principal changes. The formula is EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the amount borrowed, r is the monthly rate (the annual rate divided by 12 and by 100) and n is the number of monthly instalments.

In the first years almost the whole instalment is interest, because interest is charged on the outstanding balance. On a ₹50 lakh loan at 8.5% over 20 years, roughly ₹35,000 of the first ₹43,000 instalment is interest. The balance tips towards principal only around the middle of the tenure — which is why prepaying early saves far more than prepaying late.

What the calculator does not include

Banks add processing fees (usually 0.25–0.50% of the loan, often capped), legal and technical valuation charges, documentation and stamping costs, and property insurance if you buy it through them. Budget another 1–2% of the loan for these. The EMI also excludes registration and stamp duty on the purchase itself — use the stamp duty calculator for that.

Choosing a tenure

A longer tenure lowers the instalment and raises the total interest. Stretching that ₹50 lakh loan from 15 to 25 years drops the EMI by about a fifth but adds several lakh rupees of interest over the life of the loan. A common compromise is to take the longer tenure for safety and then prepay whenever a bonus arrives — floating-rate home loans to individuals cannot carry a prepayment penalty under RBI rules, so this costs nothing.

Interest rates in India

Most home loans are floating and linked to an external benchmark, usually the RBI repo rate, plus a spread that depends on your credit score, income profile and loan-to-value ratio. Rates move when the benchmark moves; your bank normally keeps the EMI the same and changes the tenure instead, unless you ask otherwise. A score above 750 typically gets the best published rate.