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Home Loan.

Calculate home loan EMI, total interest, tax savings and prepayment impact. Includes mortgage calculator, rent vs buy comparison. Free, no signup.

Last updated: June 15, 2026
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Amount: ₹10,00,000 Loan: ₹40,000,000
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Calculation Results

Monthly EMI 0
Total Interest 0
Amount Payable 0
LTV Ratio 0%
Break-even M0
Prepayment: Pay extra per month
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Saves 0 Closes 0mo early
Rate Change Scenario
If rate shifts +0.00% New EMI: 0

Cost Breakdown

Loan Balance Curve

Principal vs Interest Paid

Disclaimer: This calculator provides estimates for educational purposes only. Actual rates and terms may vary based on your lender, credit profile, and market conditions.

Quick Answer

How is home loan EMI calculated?

Home loan EMIs are calculated using the standard reducing balance formula. For a ₹50 lakh home loan at 8.5% interest over 20 years, your monthly EMI will be ₹43,391. Over the entire 20-year tenure, you will pay ₹54,13,879 in interest alone.

Formula
EMI = P × r × (1+r)^n / ((1+r)^n - 1) Where: P = Principal | r = Monthly rate (Annual÷12÷100) | n = Tenure in months
Example
P=₹50,00,000 | r=8.5/12/100=0.007083 | n=240 EMI = 50,00,000 × 0.007083 × (1.007083)^240 / ((1.007083)^240 - 1) EMI = ₹43,391/month
Last updated: June 15, 2026

What does your result mean?

You're borrowing 0 at 0% for 0 years.

Your monthly EMI of 0 means you'll pay 0 in total over the life of the loan — nearly 1x the original loan amount!

Because mortgages use compound interest on the outstanding balance, in your first month, 0 goes to the bank as interest, and only 0 actually builds equity in your home. This is why the Balance Curve chart looks like a "hockey stick" — your balance barely drops for the first several years.

Your break-even point is Month 0. Only after this point does more of your monthly payment go toward your principal than toward interest.

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Rent vs Buy Analysis

Enter how much you currently pay in rent for a similar property. We assume your rent inflates 5% per year, and compare the cumulative cash outflow over 20 years.

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Home Loan EMI (Reducing Balance)

Home loans use the standard reducing balance EMI formula. This means interest is calculated only on the remaining outstanding principal:

EMI = [P x R x (1+R)^N] / [(1+R)^N - 1]
  • P = Principal loan amount
  • R = Monthly interest rate (Annual Rate / 12 / 100)
  • N = Loan tenure in months (Years × 12)

This standard mathematical model is used by all major banks including SBI, HDFC, and ICICI for calculating amortizing home loans.

Common mistakes when taking a home loan.

Mistake: Focusing only on the lowest EMI
Correct: Look at the total interest paid. A 30-year loan has a lower EMI than a 20-year loan, but you pay nearly double the total interest.
Impact: Paying 150%+ of your property value just in interest to the bank.
Mistake: Not making regular prepayments
Correct: Pay just 1 extra EMI every year or increase your EMI by 5% annually.
Impact: Missed opportunity to shave 5-8 years off your loan tenure.
Mistake: Ignoring the impact of fixed vs floating rates
Correct: Floating rates are usually cheaper long-term and allow penalty-free prepayment in India.
Impact: Being locked into an expensive fixed rate when market rates fall.

Amortization Schedule

Month/YrPrincipalInterestPaymentBalance
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How is home loan EMI calculated?

EMI is calculated using a standard formula: P x R x (1+R)^N / [(1+R)^N - 1]. 'P' is the loan amount, 'R' is the monthly interest rate, and 'N' is the loan tenure in months.

What is the current home loan interest rate in 2025?

In India, home loan rates currently range between 8.35% and 9.50% depending on your credit score and loan amount. In the US, average 30-year fixed mortgage rates fluctuate based on Federal Reserve policy.

How much home loan can I get on ₹1 lakh monthly salary?

Lenders generally use the FOIR (Fixed Obligation to Income Ratio) rule. They want your total EMIs to be under 50% of your take-home pay. With a ₹1L salary, you can afford an EMI of up to ₹50,000, translating to a loan of roughly ₹55-60 Lakhs for 20 years.

Should I choose fixed or floating rate home loan?

In India, over 90% of home loans are floating rate because they don't carry prepayment penalties. If interest rates are expected to fall, floating is better. A fixed rate is only recommended if rates are historically low and you want to lock them in.

How does prepayment reduce home loan tenure?

Because home loans use reducing balance math, paying even ₹5,000 extra per month directly attacks your principal balance. This skips the compound interest that would have accrued on that principal, saving you massive amounts of money and shaving years off your tenure.

What tax benefits do I get on a home loan in India?

Under the Old Tax Regime, you can claim up to ₹1.5 Lakhs per year on principal repayment (Section 80C) and up to ₹2 Lakhs per year on interest paid (Section 24b).

What is LTV ratio and how does it affect my loan?

LTV stands for Loan-to-Value. It is the percentage of the property price you are borrowing. An 80% LTV means you put 20% down. Lower LTVs are less risky for banks and often get you better interest rates.

Is it better to rent or buy a house in 2025?

Financially, it depends on rent yields vs interest rates. If you can rent a house for 2.5% yield but a mortgage costs 8.5%, renting and investing the difference in equity is often mathematically better. However, buying offers emotional security and protection against rent inflation.

Further reading.