Home loan EMI calculator

How the home loan EMI calculator works

A home loan EMI is the fixed monthly payment on a housing loan, made up of interest on the balance you still owe plus a part of the principal, calculated on the reducing-balance method every Indian bank uses. Give the calculator your loan amount, the rate your bank quotes and the tenure, and it returns the EMI, the total interest, the EMI for every common loan size, what each tenure costs, the Section 24(b) relief if you are in the old regime, and whether that EMI fits your income.

Take the default. A ₹30,00,000 loan at 8.5% for 20 years has an EMI of ₹26,035. Over 240 months you repay ₹62,48,400, and ₹32,48,400 of that is interest, more than the amount you borrowed. That is the reality of a long home loan, and it is why the rate and the tenure matter far more than most buyers expect.

The home loan EMI formula

EMI is P times r times (1 + r) to the power n, all divided by (1 + r) to the power n minus 1, where P is the loan amount, r the monthly rate and n the tenure in months. The monthly rate is the annual rate divided by 12 and by 100, so 8.5% a year is about 0.00708 a month. Interest is charged only on the balance still outstanding, so as the balance falls the interest slice of each EMI shrinks and the principal slice grows, even though the EMI never changes.

Most home loans in India float with the RBI repo rate. When the rate resets, the bank usually keeps the EMI steady and changes the tenure, or keeps the tenure and changes the EMI. Re-run this tool with your new rate to see the effect either way.

EMI per lakh, and every loan size

The EMI per lakh is the installment on a ₹1,00,000 loan at a given rate and tenure, and multiplying it by the number of lakhs gives your EMI. At 8.5% for 20 years that figure is about ₹868 per lakh, so a ₹50,00,000 loan runs to ₹43,391 a month and a ₹1,00,00,000 loan to ₹86,782.

The shortcut is a few rupees out at large amounts, because the per-lakh figure is itself rounded: ₹868 times 50 gives ₹43,400 against a true ₹43,391, and times 100 gives ₹86,800 against ₹86,782. Use it to size a loan in your head, and the live table above, which holds your rate and tenure fixed across every common loan amount, when the exact rupee matters.

The interest keeps pace with the loan. Borrow more and you do not just pay a bigger EMI, you hand over lakhs more in interest across the two decades, which is the case for keeping the loan amount and the tenure as tight as your budget allows.

What the tenure really costs

A longer tenure buys a lower EMI with a great deal more interest, because the balance keeps earning the lender interest for more years. On the default ₹30,00,000 at 8.5%:

Read the rows against each other rather than one at a time. Stretching from 15 years to 20 drops the EMI by ₹3,507 a month and adds ₹9,30,840 of interest. Stretching from 20 to 30 drops it by a further ₹2,968 and adds ₹20,55,720. The monthly relief shrinks every time you stretch, and the interest bill does not.

That is the argument for taking the shortest tenure your income comfortably carries and using prepayment, rather than a long tenure, as the safety valve.

The tax you save, and the regime that decides it

Section 24(b) allows up to ₹2,00,000 of home loan interest on a self-occupied property each year and Section 80C up to ₹1,50,000 of the principal, but both exist only in the old tax regime. The new regime under Section 115BAC has been the default since FY 2023-24, and it allows neither. If you have never actively opted into the old regime, your home loan is saving you nothing in tax.

On the default ₹30,00,000 loan the first-year interest is ₹2,52,709, so it clears the ₹2,00,000 cap in year one. In the old regime a 30% slab taxpayer saves ₹60,000 at the slab rate, or ₹62,400 once the 4% health and education cess is counted. In the new regime that same borrower saves nothing. The regime selector above switches the calculator between the two.

Three limits most calculators leave out

• The ₹2,00,000 cap falls to ₹30,000 where the loan was for repairs, renovation or reconstruction, or where the purchase or construction is not finished within five years from the end of the financial year you took the loan. At the 30% slab that is ₹9,000 of relief instead of ₹60,000.
• A let-out property has no interest cap at all. The whole interest comes off the rent. The loss that leaves can be set against your other income only up to ₹2,00,000 a year in the old regime, and not at all in the new, where it simply lapses.
• Interest paid before construction finishes is not lost. It is deductible in five equal instalments from the year construction completes, and those instalments sit inside the same ₹2,00,000 cap rather than on top of it.

Two more things worth knowing. The ₹1,50,000 under Section 80C is a single shared pot, so if your EPF, PPF, insurance premiums or ELSS already fill it, the home loan principal adds nothing on top. And Section 80EEA is closed: it only ever covered loans sanctioned between 1 April 2019 and 31 March 2022, so no loan taken since can claim it.

How much home loan your salary supports

Banks size a home loan against the FOIR, the fixed obligations to income ratio, and usually cap the total of your EMIs at about 50% of gross monthly income. Enter your income in the calculator and it shows the EMI as a share of it plus the largest loan a 50% FOIR allows at your rate and tenure. On a ₹1,00,000 monthly income, a 50% FOIR leaves ₹50,000 for the EMI, which supports close to ₹57,60,000 over 20 years at 8.5%, before the bank layers on its own checks.

Those checks are real. Lenders also weigh your credit score, age, job stability and any running EMIs, and they lend only up to about 75% to 90% of the property value. So this figure is a planning ceiling, and the bank keeps the final say.

What prepaying knocks off

Because interest is charged on the balance still outstanding, every rupee of principal you pay early also removes all the future interest that balance would have earned. On the default loan, ₹1,00,000 paid at the end of each year clears it in 141 months instead of 240 and saves ₹14,84,407 of interest.

The convention matters as much as the figure. That assumes the first ₹1,00,000 lands after twelve months. Start the same schedule on day one and the loan closes in 132 months having saved ₹16,45,939, a difference of ₹1,61,532 from timing alone. When a calculator quotes a prepayment saving without saying when the money arrives, it is not telling you enough to compare.

Since the RBI directions of 2 July 2025, a lender cannot charge you for prepaying a floating-rate home loan taken for a purpose other than business, where the loan was sanctioned or renewed on or after 1 January 2026. Fixed-rate loans sit outside that protection. The loan prepayment calculator sets cutting the tenure against cutting the EMI.

What this does not promise

This calculator uses the reducing-balance math every bank applies, but a real home loan carries costs the monthly figure leaves out: a processing fee, legal and valuation charges, property insurance, and a floating rate that moves over 20 years. The tax numbers assume the old regime, as the section above sets out, and your actual benefit still depends on your income and other deductions. Loan approval rests on your income, credit history and the lender's rules. Treat all of this as planning, not financial advice, and confirm the exact terms with your bank and a qualified tax adviser before you sign. Once the loan is running, what a lump sum knocks off the tenure is usually the largest lever left, and the 80C room the principal already uses is worth checking before you claim it twice.

Frequently asked questions

What is a home loan EMI calculator? A home loan EMI calculator works out the fixed monthly installment on a housing loan from the loan amount, the interest rate and the tenure, using the reducing-balance method Indian banks apply. A ₹30,00,000 loan at 8.5% for 20 years has an EMI of ₹26,035 and about ₹32,48,400 of total interest.

What is the home loan EMI formula? The EMI formula is EMI = P times r times (1 + r) to the power n, divided by (1 + r) to the power n minus 1, where P is the loan amount, r is the monthly rate (the annual rate divided by 12 and by 100) and n is the tenure in months. Interest each month is charged on the balance still outstanding, so early EMIs are mostly interest and later ones mostly principal.

What is the EMI per lakh on a home loan? The EMI per lakh is the monthly installment on a ₹1,00,000 loan at a given rate and tenure, and you multiply it by the number of lakhs to get your EMI. At 8.5% for 20 years the EMI is about ₹868 per lakh. The shortcut is a few rupees out at large amounts because the per-lakh figure is rounded: it gives ₹43,400 on a ₹50,00,000 loan where the exact EMI is ₹43,391.

How much tax can I save on a home loan? Only in the old regime. There Section 24(b) allows up to ₹2,00,000 of interest on a self-occupied home and Section 80C up to ₹1,50,000 of principal, so on a ₹30,00,000 loan whose first-year interest is ₹2,52,709 a 30% slab taxpayer saves ₹60,000 at the slab rate, or ₹62,400 once the 4% cess is counted. The 80C limit is shared with other 80C investments like EPF and PPF. Under the new regime a self-occupied property gets neither relief, so the saving is nil.

How much home loan can I get on my salary? Banks usually cap the total of your EMIs at about 50% of gross monthly income, a limit called the FOIR, so a higher income supports a larger loan at the same rate and tenure. Enter your monthly income in the calculator to see the EMI as a percentage of it and the largest loan a 50% FOIR allows, though each lender sets its own limit and also checks your credit score and age.

Should I choose a longer or shorter tenure? A longer tenure lowers the EMI but raises the total interest, because the balance keeps earning the lender interest for more years. On a ₹30,00,000 loan at 8.5%, going from 15 years to 20 cuts the EMI by ₹3,507 a month and adds ₹9,30,840 of interest; going from 20 to 30 cuts it by a further ₹2,968 and adds ₹20,55,720. The monthly relief shrinks each time you stretch and the interest bill does not.

Does prepaying a home loan help? Because interest is charged on the outstanding balance, a part-payment reduces that balance and every future interest charge on it, so the loan finishes sooner or the EMI drops. On a ₹30,00,000 loan at 8.5% over 20 years, ₹1,00,000 paid at the end of each year clears it in 141 months instead of 240 and saves ₹14,84,407 of interest. Under the RBI directions of 2 July 2025 a lender cannot charge for this on a floating-rate home loan taken for a purpose other than business, where the loan was sanctioned or renewed on or after 1 January 2026; fixed-rate loans are outside that protection.

What is pre-EMI on an under-construction home? Pre-EMI is the interest-only payment a bank charges on the amount disbursed so far while a property is still under construction, before the full loan converts to a regular EMI. It is smaller than a full EMI because it pays no principal, so the loan balance does not fall until the full EMI begins. That interest is not wasted: it is deductible in five equal instalments from the year construction completes, inside the same ₹2,00,000 Section 24(b) cap rather than on top of it.

Can I claim home loan deductions under the new tax regime? Not on a self-occupied property. Section 24(b) interest relief and Section 80C principal relief are both old-regime deductions, and the new regime under Section 115BAC has been the default since FY 2023-24, so a borrower who never opted into the old regime claims neither. A let-out property is different: the full interest still comes off the rent with no cap, but the resulting loss cannot be set against other income in the new regime and lapses instead.

When is the home loan interest deduction limited to ₹30,000? The Section 24(b) cap on a self-occupied property drops from ₹2,00,000 to ₹30,000 where the loan was taken for repairs, renovation or reconstruction, or where the purchase or construction is not completed within five years from the end of the financial year in which the loan was taken. At the 30% slab that is ₹9,000 of relief rather than ₹60,000.

Is the home loan interest rate fixed or floating? Most Indian home loans are floating-rate and reset with the RBI repo rate, so the EMI or the tenure changes when the rate moves. A fixed-rate home loan keeps the same rate for a set period and usually starts higher. This calculator uses the rate you enter, so re-run it with your reset rate to see the new EMI.

Sources

• ClearTax, Section 24 deductions, the regime position, the ₹30,000 cap and pre-construction interest
• Kotak Mahindra Bank, home loan tax benefit for self-occupied and let-out property
• Business Standard, the Section 80EEA sanction window closing on 31 March 2022
• Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025
• Income Tax Department, deductions on home loan interest and principal
• ClearTax, home loan tax benefits under Section 24, 80C and 80EEA
• Reserve Bank of India, repo rate and lending framework
• SEBI investor education, EMI calculator and reducing-balance formula