Home loan EMI calculator

Home loan EMI calculator is a financial tool that allows the applicants to calculate the EMI and total interest cost depending on the loan amount, interest rate and loan tenure. Prospective borrowers can use the home loan EMI calculator available on Paisabazaar to evaluate their financial stability and plan their EMIs as per their budget.

The Home Loan EMI is calculated using a standard mathematical formula that considers the loan amount, interest rate, and loan tenure.

EMI Calculation Formula

EMI = [P × R × (1+R)^N] / [(1+R)^N – 1]

Meaning of Variables

Example Calculation

Suppose:

Monthly Interest Rate (R) = 8.5 ÷ 12 ÷ 100 = 0.00708

Using the formula, your EMI will be approximately ₹26,035 per month.

Home loan EMI calculator works on a standard mathematical formula. Follow the steps to know the working of a home loan EMI calculator:

Your home loan EMI primarily depends on the following factors:

Home loan applicants prefer using Paisabazaar’s EMI calculator for the following reasons:

Prospective borrowers can use the Paisabazaar home loan EMI calculator while planning their budget. All they need to do is enter the loan amount, interest rate and loan tenure in the EMI calculator and get their EMIs and total interest cost.

This helps the applicants in assessing their loan affordability and allows them to plan their EMIs as per their budget. Note that lenders usually consider applicants whose EMI/NMI ratio is generally below 50-55%, including the existing EMIs and EMIs of the proposed home loan.

Prepayment usually reduces the home loan EMI. Whenever you have surplus funds, you can repay a lump sum amount towards your outstanding principal over and above the regular EMI. This lowers your principal amount and eventually the EMI and interest cost, provided the loan tenure remains the same.

As per the RBI’s directive, Lenders cannot levy a penalty on prepayment for floating-rate home loans. However, for fixed-rate home loans, lenders might charge a prepayment fee of up to 4% of the outstanding loan amount.

It is advisable to prepay your loan amount in the early years of your loan tenure. This is because the interest component is higher in the early years.

Below is the yearly amortization schedule for a Rs. 25,00,000 home loan at 7.10%, outlining the Opening Balance, Total Annual EMI (EMI × 12), Interest Paid During the Year, Principal Repaid, and Closing Balance.