Home Loan EMI Calculator
Calculate EMI, tax benefits, and plan prepayments for your dream home.
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✨ Includes charts, prepayment analysis & more
💡 What is a Home Loan EMI?
EMI (Equated Monthly Installment) is the fixed monthly payment you make to repay your home loan. It consists of two parts:
- •Principal: The actual loan amount you borrowed
- •Interest: The cost of borrowing, charged by the lender
In the early years, interest forms a larger part of your EMI. As you continue paying, the principal component gradually increases.
🧮 How is Home Loan EMI Calculated?
Home loan EMI is calculated using the standard mathematical formula:
EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1]- P = Principal loan amount
- r = Monthly interest rate (Annual rate ÷ 12 ÷ 100)
- n = Total number of months (Tenure in years × 12)
📊 What is LTV (Loan-to-Value) Ratio?
LTV ratio determines how much loan you can get based on property value:
LTV = (Loan Amount ÷ Property Value) × 100- ✓<80% LTV: Lower interest rates, easier approval
- ⚠80-90% LTV: Standard rates, may require higher income proof
- ✕>90% LTV: Higher rates, stricter eligibility
💰 Home Loan Tax Benefits in India
Indian tax laws provide significant deductions on home loans:
*Total potential tax benefit: Up to ₹3.5L per year if you claim both sections
⚡ How Prepayments Save Interest
Making prepayments can dramatically reduce your total interest burden:
- ✓Early prepayments work best: Save maximum interest in first 5-7 years
- ✓Two strategies: Reduce tenure (save more interest) or reduce EMI (lower monthly burden)
- ✓No penalties: RBI guidelines allow free prepayment for floating rate loans
💡 Example: A ₹50L loan @ 8.5% for 20 years costs ₹52L in interest. Paying ₹10K extra monthly saves ₹19L and finishes 7 years early!
📋 Home Loan Affordability: Safe EMI Percentage
Financial experts recommend keeping your EMI within specific income limits:
Use the affordability calculator above to check if your loan is within safe limits