# Home Loan EMI Calculator

Created by Tibor Pál, PhD candidate and Purnima Singh, PhD
Reviewed by Dominik Czernia, PhD and Jack Bowater
Last updated: Jan 18, 2024

Use the home loan EMI calculator to get an estimate of the equated monthly installments (EMIs) on your home loan.

Continue reading to learn what a home loan is and the formula for home loan EMI calculations. You will also find answers to questions like:

• How to get a home loan?
• How much CIBIL score is required for a home loan?
• What are the different interest rate options available in India?
• How to calculate home loan EMI?
• What are the tax benefits of a home loan?

We have also included an example of how to calculate home loan EMI on a 50 lakh loan.

If you have found your dream home and are now wondering whether you can afford it. Our home affordability calculator can help you with that. Otherwise, you can also use our rent or buy calculator if you are confused about whether to buy a home or rent.

## What is a home loan?

As the name suggests, a home loan is a sum of money that you borrow from a financial institution (usually a bank or some other lending company) to purchase or construct a house. You can also take a home loan to buy a plot to build the house on or to renovate and repair your existing house.

While you take out a home loan, you mortgage your house (as collateral) to the lender until you repay the loan amount. You repay the borrowed money to the lender (principal and interest) in equated monthly installments (EMIs).

If you cannot pay your dues, the lender has the legal right to possess your property. It can then recover the outstanding loan amount by selling the property.

## Types of home loans in India

Depending upon your purpose, you can avail different types of home loans in India:

• Home purchase loan;
• Home construction loan;
• Home extension loan;
• Home improvement loan;
• Land purchase loan;
• Home loan balance transfer; and
• Top up home loan.

## How to calculate home loan EMI? — Formula for home loan EMI calculations

To calculate a home loan EMI, we can use the formula:

$\scriptsize EMI = P \times R \times \left ( \frac{(1+R)^N}{(1+R)^N - 1} \right )$

where,

• $EMI$ - Equated monthly installments;

• $P$ - Loan amount given to you by the bank;

• $R$ - Rate of interest set by the bank (calculated on a monthly basis); and

• $N$ - Loan tenure/duration in months.

There are three variables in this formula for home loan EMI. Every time there is a change in any of the three, the EMI value will also change.

## Calculating home loan EMI on 50 lakh

For example, suppose you want to take a home loan of Rs. 50 lakh and want to calculate your EMI. Let us assume that the annual rate of interest offered by your bank is 7.5% and the loan tenure is 20 years.

1. We can calculate the monthly interest on the home loan as:
$\quad \quad \scriptsize R = \frac{7.5}{(12 \times 100)} = 0.00625$
1. Since you are making monthly loan repayment installments, the total number of payments made in 20 years (12 per year) is:
$\quad \quad \scriptsize N = 12 \times t = 12 \times 20 = 240$
1. Hence, the approximate EMI on a 50 lakh home loan will be:
$\quad \quad \scriptsize \begin{split} EMI =\ & \text{Rs.}\ 50,00,000 \times 0.00625 \times \\ & \left ( \frac{(1+ 0.00625)^{240}}{(1+ 0.00625)^{240} - 1} \right )\\ =\ & \rm Rs. \ 40,280 \end{split}$

## How to use the home loan EMI calculator?

Now we will see how you can calculate your home loan EMI in a few seconds using our housing loan EMI calculator for India:

• Home loan inputs
1. Enter your loan amount (Rs. 50 Lakh) and loan tenure (20 years) into the respective fields.

2. Input the interest rate offered by your bank (7.5%).

3. Input other relevant information, for example, processing fee (e.g., 0.4% of the loan amount = Rs. 20,000) or any additional one-time upfront fees charged by your bank. You can get this information from your bank's website.

• Payment summary
1. Most importantly, the home loan EMI calculator for India will give you an estimate of your monthly EMI (Rs. 40,280).

2. You can also see the Annual Percentage Rate (APR), which allows you to compare different home loan offers since it incorporates all costs and fees.

3. The tool will list a summary of payments made during the entire loan tenure, i.e., total interest payable (Rs. 46,67,118) and total payment (interest + principal) (Rs. 96,87,118).

4. At the very end, you find a detailed account of your periodic principal and interest payments, as well as the outstanding amount at any time in the form of an amortization schedule and a chart of balances.

If you are about to suspend your EMI payment, check our moratorium calculator, to check the effect of a moratorium on your repayment. We also recommend checking our personal loan EMI, bike loan EMI, and car loan EMI calculators.

## Interest rate on home loans

Banks in India usually offer two options for interest rates:

• Floating rate home loans - The interest rates change with the market interest rates. Hence your EMI changes when the market rates change. Floating interest rates are usually lower than fixed interest rates.

• Fixed-rate home loans - The interest rate is fixed for the entire loan tenure or a certain part of the loan tenure. As your EMI is fixed and known to you in advance, you can plan your budget accordingly. You will also benefit from a fixed-rate loan if the interest rates go up. However, if the market's interest rates go down, it will not benefit you. If you opt for a fixed-rate home loan, don't forget to check the reset clause.

The current (2021) home loan interest rates in India start from 6.65%. It is advisable to shop around, compare and negotiate with different lending institutions so that you can get the best deal on your home loan.
For further information, you can also refer to the .

## How to get a home loan?

To get a home loan, you need to approach a bank or other lending institution with the following documents:

• Proof of identity and residence;
• Proof of income and employment (salary slip, bank account statements, tax return);
• Property registration papers; and
• A photograph of yourself.

The institution will assess your loan repayment capability based on your financial profile, for example, your monthly income, assets, liabilities, credit score, etc. It may also take into account other factors like your age and family status.

Apart from your eligibility, the institution will consider the value of the property to be financed to decide your loan amount.

Once your application is approved, the loan amount can be disbursed to your account.

## Tax benefits of home loan

Under the Indian Income Tax Act, 1961, you can claim tax benefit on home loan repayments as follows:

• A rebate of up to Rs. 2,00,000 per year on your interest repayment under Section 24B.

• An additional tax benefit under Section 80C on repayment of principal amount up to Rs. 1,50,000 per financial year.

## Home loan EMI calculator disclaimer

You should consider the present Home loan EMI calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are not exhaustive despite our best effort.

We have created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.

## FAQ

### Can I pay more than the EMI on a home loan?

Yes, you can pay more than EMI on a home loan. The additional payment will reduce your principal and, in turn, will result in reduced interest.

### How to reduce the EMI of an existing home loan?

There are several ways to reduce the EMI of an existing home loan:

• Keep track of the change in interest regimen and switch to a new regimen if it offers you a better rate.
• Make partial repayments of your loan to reduce the outstanding principal amount.
• Extend your loan tenure but it will also mean paying more interest and will make your home loan more expensive.

### When does EMI start for a home loan?

The EMI for your home loan starts one month after the month in which you take the full disbursement.

However, if your loan is disbursed in installments, you will have to pay pre-EMI interest (i.e., interest on the part of the loan disbursed) every month from the start of each disbursement.

### How much CIBIL score is required for a home loan?

The ideal CIBIL score required for a home loan is 750 or above. However, you still have a fairly good chance of getting your loan application approved if your score is between 650-750.

### Is insurance mandatory for home loan?

No, it is not mandatory to buy a home loan insurance policy to receive a home loan. However, it is still advisable to buy one as a cover against any loss in case of misfortune.

### What is an EMI?

EMI stands for Equated Monthly Installment. When you take a loan from any financial institution, you repay them the principal and interest back through EMIs.

Tibor Pál, PhD candidate and Purnima Singh, PhD
Home loan inputs
Loan amount
Tenure
yrs
mos
Interest rate
%
Processing fee percentage
%
Processing fee
Home loan fees
Payment summary
Display...
chart of balances
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 Equated Monthly Installment (EMI) ₹ 40,280 Annual Percentage Rate (APR) 7.553% Home loan tenure 20 years Loan principal ₹ 50,00,000 Total interest payable ₹ 46,67,118 Loan fees ₹ 20,000 Total payments ₹ 96,87,118