Home Loan EMI Calculator

EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly instalments. For example, a ₹40 lakh loan at 8.5% for 20 years works out to an EMI of about ₹34,700 per month.

Most Indian banks let you choose. Reducing tenure (keeping EMI the same, paying off faster) saves far more interest than reducing EMI (keeping tenure the same, lowering the monthly payment) for the same prepayment amount. This calculator assumes you keep your EMI fixed and pay extra every month, which maximizes interest savings.

As per RBI rules, banks and NBFCs cannot charge foreclosure or prepayment penalties on floating-rate home loans taken by individual borrowers. Fixed-rate loans may still carry prepayment charges, typically 2-4% of the prepaid amount — check your loan agreement before prepaying a fixed-rate loan.

Compare your loan interest rate to your expected investment return. If your home loan rate is 8-9% and you can realistically earn 12%+ from an equity SIP over the long term, investing may build more wealth. But prepayment is a guaranteed, risk-free return equal to your loan rate, while SIP returns are market-linked and not guaranteed. Many people do both — prepay a portion and invest the rest.

Under the Old Tax Regime: Section 24(b) allows up to ₹2 lakh deduction on home loan interest for a self-occupied property, and Section 80C allows up to ₹1.5 lakh deduction on principal repayment. The New Tax Regime does not allow either deduction for a self-occupied property, though interest on a let-out (rented) property remains deductible under both regimes.

Floating rates move with RBI's repo rate and are usually lower to start, with no prepayment penalty — better if you plan to prepay or rates may fall. Fixed rates stay constant for a set period, offering predictability but usually at a higher starting rate, and may carry prepayment charges. Most home loans in India today are floating-rate (repo-linked).