Calculate your home loan EMI, total interest and a year-wise repayment schedule — using the same reducing-balance method your bank uses (rate as of indicative ranges 2026 — verify with your lender).
How this home loan EMI calculator works
An EMI (Equated Monthly Instalment) is a fixed monthly payment that covers both interest and principal. It is calculated on a reducing balance, so as you pay down the loan, the interest portion of each EMI falls and the principal portion rises:
EMI = P × i × (1 + i)n ÷ [ (1 + i)n − 1 ]
where P is the loan amount, i is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly instalments (years × 12). This is the exact method banks use, so the EMI here matches your sanction letter.
Worked example: ₹30 lakh for 20 years at 8.5%
A ₹30,00,000 loan at 8.5% for 20 years gives a monthly EMI of ₹26,035. Over the full term you pay ₹62,48,327 in all — that is the ₹30 lakh principal plus ₹32,48,327 (₹32.48 lakh) of interest. Notice that the total interest is nearly as much as the amount you borrowed: that is the cost of a long tenure.
How tenure and rate change the total interest
Stretching the tenure lowers your monthly EMI but raises the total interest, because the balance compounds for longer. Shortening it does the opposite. On the same ₹30 lakh loan at 8.5%, repaying over 15 years instead of 20 raises the EMI but cuts total interest by about ₹9,30,734. A lower interest rate helps on both fronts at once. Use the tenure and rate inputs above to see your own trade-off.
Why prepayment is so powerful early on
Because EMIs are front-loaded with interest, a lump-sum prepayment in the first few years goes almost entirely against principal and removes years of future interest. Floating-rate home loans carry no foreclosure penalty for individual borrowers, so even one extra EMI a year — directed at the principal — meaningfully shortens the loan. Park your prepayment fund in an FD until you are ready to deploy it.
How much loan can your salary support?
Lenders typically keep your combined EMIs (this loan plus any personal or car loan) within 40–50% of net monthly income. Your credit score, age, tenure and the property's loan-to-value cap all feed into the final sanction. Treat the EMI above as the affordability test: if it sits comfortably inside that 40–50% band, the loan is sustainable.
Frequently Asked Questions
How is home loan EMI calculated?
EMI uses the reducing-balance formula: EMI = P × i × (1+i)n ÷ [(1+i)n − 1], where P is the loan amount, i the monthly rate (annual rate ÷ 12) and n the number of months. Banks use exactly this method, so the figures here match your sanction letter within a rupee or two.
How can I reduce my home loan EMI?
Three levers: a longer tenure lowers the monthly EMI (but raises total interest), a lower interest rate cuts both, and a bigger down payment shrinks the principal. Refinancing to a cheaper lender or asking your bank to reset to the latest repo-linked rate can also drop the EMI without changing the tenure.
Fixed vs floating home loan rate — which is better?
Most Indian home loans are floating (repo-linked), so the EMI changes when the RBI repo rate moves. Floating is usually cheaper over a long tenure and lets you prepay without penalty. A fixed rate buys certainty but is priced higher and may carry foreclosure charges. For a 15–20 year loan, floating is the common choice.
Does prepayment really save money?
Yes — substantially, because early EMIs are mostly interest. On a ₹30 lakh, 20-year loan at 8.5%, paying it off in 15 years instead saves roughly ₹9,30,734 in interest. Even one extra EMI a year, applied to principal, can shave years off the term. Floating-rate loans carry no prepayment penalty for individuals.
How much home loan can I get on my salary?
As a rule of thumb, lenders keep your total EMIs (this loan plus any others) within 40–50% of your net monthly income. So on a ₹1,00,000 net salary, total EMIs of about ₹40,000–₹50,000 are typical. Eligibility also depends on credit score, tenure, age and the property value (the loan-to-value cap).
What is the difference between EMI and total payment?
The EMI is your fixed monthly outgo. Total payment is EMI × number of months — it equals the principal plus all the interest. On a long loan the total interest can approach or exceed the amount you borrowed, which is exactly why prepayment and a shorter tenure matter.
Is home loan interest tax-deductible?
Under the old tax regime, you can claim up to ₹2 lakh of interest a year on a self-occupied property under Section 24(b), plus principal repayment within the ₹1.5 lakh Section 80C limit. The new regime largely removes these benefits. Verify the current rules for the relevant financial year.
Estimates are for information and education only — not financial, tax or investment advice. Verify current rates and rules with official sources.