Home Loan EMI Calculator helps you determine your monthly home loan payment with ease. Home loan calculator calculates home loan EMI (Equated Monthly Installment) on the basis of a few basic home loan details, loan amount, interest rate and loan tenure. You can adjust input values in the housing loan EMI calculator several times till you get an EMI that fits your budget. Besides calculating your home loan EMI, the house loan calculator also displays total interest payable, total principal payable and amortization schedule.
How is home loan EMI calculated?
You can calculate your home loan EMI in less than a second using Paisabazaar’s Home Loan Calculator. It is accurate and easy for anyone to use. The housing loan calculator requires just a few key home loan details from the user to display results.
Here’s a step-by-step guide to using the housing loan EMI calculator:
Step 1: Input the amount you wish to borrow
Step 2: Input the applicable home loan interest rate (Compare the latest home loan rates)
Step 3: Input the tenure over which you want to repay your home loan
As soon as you complete the above steps, your home loan EMI will be displayed along with other details such as total interest payable and the total amount payable.
Now that you know how much EMI you can afford, click to apply for home loan.
How does Home Loan EMI Calculator work?
Most Home Loan EMI Calculators work on the basis of a mathematical formula given as below:
Home Loan EMI Calculation Formula:
In this formula,
Home loan interest rates are annual. To get the monthly home loan rate, divide the annual rate by 12.
The loan tenure should be in months. To get the loan term in months or the number of EMIs for your loan, multiply the number of years in your loan term by 12.
You can use the above formula to calculate home loan EMI manually. However, manual calculation will not only be time-consuming but also exhausting. With the availability of online home loan calculator, you do not need to spend a lot of time on these tedious calculations. The loan EMI calculator can give you results in an instant by just entering values in the required fields.
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Why should you know your home loan EMI in advance?
Knowing your home loan EMI in advance will help you answer the following questions:
- How much should you borrow on your home loan?
- Should you go for a long-term or a short-term home loan?
- How much should you contribute towards your home down payment?
It will also help you plan out your finances beforehand to ensure timely loan repayments.
What factors affect your home loan EMI?
Factors affecting your home loan EMI are:
- Loan Amount: It is the amount that you borrow as a home loan from your lender. The higher the amount borrowed, the higher will be your home loan EMI, provided the tenure and the interest rate remains fixed.
- Interest Rate: Home loan interest rates can be fixed or floating. Fixed home loan rates remain same throughout the loan period. However, floating type home loan rates fluctuate with change in the base rate and hence, the EMIs may vary during the loan period. Higher home loan rate leads to higher home loan EMI as well as the total interest cost.
Note: Home loan interest rates vary from one lender to another, so it is best to check the latest rates before calculating the home loan EMI or applying for a home loan.
- Loan Tenure: It is the period during which the entire loan is repaid. Home loan tenure is usually of up to 30 years. Longer tenure leads to lower EMI but higher total interest payable as compared to a shorter tenure for the same loan.
How can you reduce your home loan EMI?
You can reduce your housing loan EMI by one of three ways:
- Take home loan of a lower amount
- Choose longer EMI tenure
- Get approved for a home loan at the lowest possible rate
- Partially prepay your home loan and ask your lender to reduce your EMI instead of tenure, if you are struggling to pay your current EMI
- Go for home loan balance transfer to get a lower rate on the outstanding amount
What is home loan EMI?
Home Loan EMI (Equated Monthly Instalment) is a fixed amount that a housing loan borrower must pay every month to clear off their home loan within a stipulated repayment period. The EMI of a home loan comprises of two components – principal amount and interest amount. The first EMI paid towards home loan repayment has the highest interest component and the lowest principal component. With every subsequent EMI payment, the interest component reduces while the principal component increases, resulting in the highest principal component and the lowest interest component in the last EMI.
What is a home loan EMI calculator?
A Home Loan EMI Calculator is an online tool used for calculating EMI of a home loan. Paying off home loans along with the accrued interest within the stipulated period requires precise financial planning. It is important to assess the repayment capability before opting for the loan in order to avoid any financial mess. This is where a House Loan EMI Calculator can be best put to use.
Paisabazaar’s Home Loan EMI Calculator is an easy-to-use online tool, which can be used anytime free of cost to calculate the monthly instalments to be paid towards the home loan repayment. Based on a few details about the home loan, the calculator gives an accurate amount of the EMI to be paid. The home loan calculator also functions as a home loan interest calculator as it allows users to know the interest amount due on their housing loans. The loan calculator also provides charts that display payment schedule and the break-up of the total payment in just a few simple steps.
What are the components of a House Loan EMI Calculator?
The information given by an home loan calculator usually has 3 components:
- Home Loan EMI: The home loan EMI is an amount that every borrower is liable to pay every month to its lender until the loan is fully repaid. It is the most important piece of information as it helps the borrower to know how much of a loan he/she can afford.
- Payment Breakup: The second component of the EMI calculation result is the break-down of the total amount that borrowers will be paying to their lender. This break-down will include details, such as principal amount and interest amount.
- Amortization Schedule: An amortization schedule is a tabular presentation of the payments made towards a home loan. It shows after each EMI payment, how much of the amount is going towards paying off your interest component and principal component. The amortization schedule includes all the information regarding your home loan repayment, such as loan amount, period of scheduled payments and outstanding loan after each loan payment during the entire loan period. It further provides the home loan EMI breakup detailing the repayment towards the interest and the outstanding principal of the loan. The schedule helps borrowers make an informed decision regarding home loan prepayment or balance transfer.
What are the benefits of using Paisabazaar Home Loan EMI Calculator?
Paisabazaar’s Home Loan EMI Calculator takes you a step closer to deciding on the home loan you want to apply for. The other benefits of using our home loan calculator are:
- Instant results: Our housing loan calculator for home loans cuts short your lengthy and tedious calculations to seconds. It gives results instantly, at the click of a mouse without the hassle of using a pen, paper or calculator
- Easy-to-use: Paisabazaar’s online home loan calculator is simple in its design and easy for anyone to use. To get result, all you need to do is type-in a few simple details about your housing loan in the given input fields or use sliders to adjust the value of your inputs
- Try different combinations: You can try different variations by adjusting sliders in the loan EMI calculator. You can change the loan amount, interest rate and loan tenure and recalculate your home loan EMI till you find the monthly payment that suits your budget.
- No charges: You can use this calculator any number of times you wish to without any cost. This online tool is available 24*7 on Paisabazaar website
Also Read: Documents Required for Home Loan
How to calculate home loan EMI manually?
The home loan EMI calculation formula is EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
P: Principal amount
R: Interest rate (per month)
N: Number of monthly instalments/loan tenure in months
Alternatively, you can use MS Excel to know your home loan EMI.
The formula to calculate home loan EMI in MS Excel is PMT (rate, nper, pv)
rate: home loan interest rate (in percentage)
nper: loan tenure in months
pv: loan principal (present value)
How loan amount affects the home loan EMI?
With the increase in the loan amount, the home loan EMI too increases provided the loan tenure and interest rate remains unchanged. For a clearer understanding, check the table below to see the change in home loan EMI, total interest payable and total amount payable for different loan amounts based on loan tenure stretching up to 20 years and rate of interest fixed at 6.95% p.a.
|Particulars||Floating Rate of Interest|
|Rs. 40 Lakh||Rs. 60 Lakh||Rs. 80 Lakh||Rs. 1 Crore|
|EMI||Rs. 30,892||Rs. 46,338||Rs. 61,784||Rs. 77,230|
|Total Interest Payable||Rs. 34,14,085||Rs. 51,21,127||Rs. 68,28,170||Rs. 85,35,212|
|Total Amt. Payable||Rs. 74,14,085||Rs. 1,11,21,127||Rs. 1,48,28,170||Rs. 1,85,35,212|
As one can see in the table, with the increase in the loan amount, the home loan EMI has also increased. Hence, if you want to reduce your home loan EMI, one of the ways is to contribute more towards home loan down payment so that you have to borrow less from the lender.
If you want to be eligible for a higher loan amount, you can add a co-applicant such as your spouse or sibling who has a good repayment history, stable income and a good credit score.
How loan tenure influence your home loan EMI?
Housing loan EMI decreases with the increase in the loan tenure and vice-versa. However, longer loan tenure also results in higher total interest payable. The following table shows change in the home loan EMI, total payable interest and total payable amount for a home loan of Rs. 60 lakh at an interest rate of 6.95% for different loan tenures.
|15 Years||20 Years||25 Years||30 Years|
|EMI||Rs. 53,762||Rs. 46,338||Rs. 42,216||Rs. 39,717|
|Total Interest Payable||Rs. 36,77,181||Rs. 51,21,127||Rs. 66,64,669||Rs. 82,98,077|
|Total Amt. Payable||Rs. 96,77,181||Rs. 1,11,21,127||Rs. 1,26,64, 669||Rs. 1,42,98,077|
In the table above, it can be observed that with the increase in the loan tenure, home loan EMIs decrease. But despite the decreasing EMI, the total interest payable increases with the increase in the loan tenure. And due to an increase in the total interest amount, the total amount payable towards your home loan also increases. Hence, one should be careful when choosing their home loan tenure.
One should opt for longer home loan tenure only when they are having trouble paying the current EMI. Even in case of home loan prepayment, instead of decreasing your home loan EMI, one should opt for decreasing their home loan tenure as doing so will help you save on the total interest amount. Always calculate your EMI with the help of home loan calculator before opting for housing loan.
What is the effect of home loan rates on home loan EMIs?
When looking for a home loan, every borrower should first enquire about the interest rate. This is because home loan interest rate is one of the major factors that influence affordability to own a house. It affects the overall cost of the home loan. Higher home loan rates increase the home loan EMI and reduce the ability to take on a larger loan amount. Lower home loan interest rates decrease the loan EMI and increase the possibility to:
- take on a larger loan amount
- take up a top up loan or a second loan
- reduce the loan tenure
- prepay EMIs as much as possible
As per the fund requirements and current financial situation, you can choose any of the above options.
When applying for a home loan, borrowers can opt for either fixed interest rate or floating interest rate. In case of fixed rate home loans, the EMIs will remain constant throughout the loan period. However, in case of floating rate home loans, if the interest rate decreases any time during the loan period, one of the two things could happen – decrease in the subsequent EMI amount or decrease in the loan tenure or a mix of both. And the reverse happens when the home loan rate increases. In a scenario when your home loan rate decreases, you should always ask your lender to decrease your loan tenure and keep your current EMI amount constant as it will help you save on the total loan interest. But if you are having a hard time paying your monthly installments, you can opt for lower EMI.
The following table shows changes in the home loan EMI, total payable interest and the total payable amount for a home loan of Rs. 60 lakh at different interest rates for 20 years.
|Particulars||Floating Rate of Interest|
|EMI||Rs. 46,518||Rs. 48,336||Rs. 50,186||Rs. 52,069|
|Total Interest Payable||Rs. 51,64,30||Rs. 56,00,539||Rs. 60,44,737||Rs. 64,96,655|
|Total Amt. Payable||Rs. 1,11,64,305||Rs. 1,16,00,539||Rs. 1,20,44,737||Rs. 1,24,96,655|
How home loan prepayments impact your home loan EMIs?
If a borrower partially prepays his/her home loan, then either the subsequent EMIs will get reduced or the original loan tenure will get reduced or a mix of both. The reverse happens when the borrower misses paying an EMI (due to EMI holiday or cheque dishonour or bounce or insufficient balance). In such a scenario, either the subsequent EMIs rise, the tenure of the loan increases or a mix of both, besides attracting a financial penalty, if any.
It is always advisable to prepay your home loan as soon as possible as the interest component in the initial years of loan repayment is high. Doing so will reduce the loan burden and help to save on the interest amount, which you can otherwise invest to build wealth.
Is GST applicable to home loan EMI?
No, GST (Goods and Services Tax) is not applicable to home loan EMI. However, it is applicable on several other home loan charges such as processing fees, late payment charges and prepayment charges.
How can I pay my home loan EMI?
Usually, home loan EMI is paid through ECS (Electronic Clearing System), wherein the monthly payment is directly debited from your linked bank account. You can also pay your home loan EMIs through post-dated cheques.
How does home loan EMI help in reducing tax obligation?
To reduce loan burden and to encourage more people to buy and invest in properties, the Government of India offers a host of home loan tax benefits to people. The Section 80C of the Income Tax Act, 1961, allows home loan borrowers to claim tax deductions of up to Rs. 1.5 lakh on the principal amount repaid through your EMIs annually. As per the Section 24b of the Income Tax Act, you can claim tax deductions of up to Rs. 2 lakhs on the home loan interest paid during the financial year.
Click to learn more about home loan benefits.
What if home loan EMI is not paid?
If you do not pay your home loan EMI, the lender will levy penal charges in the form of late payment fees and penal interest on the amount remaining unpaid. After a 3-month period, if the amount is still unpaid, the lender will try to recover it using recovery agents and subsequently offer you a settlement. The lender will also report this delayed payment/default to credit agencies, leading to drop in your credit score. This further will make it difficult for you to get approved for new loans/credit cards in the future.