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Home Loan EMI Calculator

Calculate your Home Loan EMI & Total Interest Due

Loan Amount
25000
Tenure
6
Loan Amount:
Tenure:
Interest Rate in %:
Processing Fee: (% of loan amount)
Would you like to make Pre-payments?
Pre-payment Frequency
Pre-payment starts in
Pre-payment amount
Loan Completion Month
Pre-payment Fee %
Pre-payment Applies to

Your Monthly Home Loan EMI: Sprite 4,292

Monthly amount paid to your Home Loan provider

Break-up of all total amount payable
Loan Amount
25000Sprite
Total Interest Due
756Sprite
Processing Fee
500Sprite
Loan Amount Via EMI
500Sprite
Loan Amount Prepaid
500Sprite
Total Interest
500Sprite
Processing Fee
500Sprite
Pre-payment Fee
500Sprite
Total Amount Payable
26252Sprite
Your loan details as specified by you
Loan Amount
25000Sprite
Tenure
6 Months
Interest Rate
10%
Processing Fee
2%
Pre-payment
25000Sprite
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Your Amortization Details (Yearly/Monthly)

Your debt repayment schedule in regular instalments over a period of time.

Tab amortization
Principal Paid Interest Paid Outstanding Loan BalanceO/S Balance(Without Pre-payment) O/S Balance(With Pre-payment)
Year Principal Paid(A) Interest Paid(B) Total Payment (A+B) Outstanding Loan Balance Pre-payment
Pre-payment Analysis

(We've broken it down for you!)

SummaryTotal AmountTenure
Without Pre-payment Rupee 47,87,42610 yrs
With Pre-payment Rupee 45,33,7238years 4months
YOU SAVE Sprite 0 YOUR TENURE REDUCED BY 1 years 8 months
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How Does BankBazaar Home Loan EMI Calculator Work? [ Easy Steps ]

The BankBazaar home loan EMI calculator is not only simple and easy to use but also free. You don’t have to sign up to use the tool. You can just visit the site and start using the home loan calculator. All you have to do is enter 3 main components to calculate your home loan EMIs:

  1. Loan Amount
  2. Loan Tenure
  3. Rate of Interest (you can get the interest rate from the bank website or your loan documents)

You are also given the option to include home loan prepayment in the EMI calculation. You can opt for monthly and yearly amortisation schedules. The amortisation table presents you with details such as outstanding balances after each EMI payment, interest payment, and principal repayment. The details will be presented in the form of tables and charts to make it easier for anyone to understand. The home loan calculator is also available on the BankBazaar mobile app.

Home Loan EMI Calculator
Home Loan EMI Calculator 2018

6 Components of the Home Loan Amortisation Table

  1. The amount borrowed by you from the bank, also known as the principal amount.
  2. The period of fixed payments
  3. Any insurance or tax payments
  4. Each contribution made towards principal repayment
  5. Each contribution made towards interest payment
  6. New outstanding balance after each payment is made

What is Home Loan Amortisation Schedule

Home loan amortisation schedule presents you with the following details:

  • Your contribution towards principal repayments
  • Interest repayment
  • Outstanding balance before and after each EMI payment

With the amortisation table, you get to know exactly when your loan repayment comes to an end.

Simple Steps to Calculate Home Loan EMI

How does Home Loan EMI is calculated:

Formula for home loan EMI calculation:

Equated Monthly Installment (EMI) = P x r x (1+r)^n/((1+r)^n -1)

Where,

EMI : Equated Monthly Installment,

P : Principal or loan amount,

r : Interest rate per month (the annual interest rate is divided by 12 to get the monthly interest rate), and

n : Number of monthly installments or loan tenure in months.

*This formula doesn’t include the home loan processing fee charged by the bank.

 Calculate Your Home Loan EMI (Example)

Mr. Patra borrowed a home loan amount of Rs.3,500,000 (Principal amount or P) from a reputed bank. The rate of interest (R) associated with the loan stands at 8.65% p.a. The tenure of the loan (N) is 360 months for 30 years.

After you apply the formula to calculate your home loan EMI, the monthly instalment amount comes up to Rs.27,285.

P = 3,500,000 R = 8.65% N = 30 years or 360 Months

Interest Rate Applied = 8.65%

Monthly EMI = Rs 27,285

EMI Paid For the Year = Rs 27,285 * 12= Rs 327,419

Home Loan Tenure Opening Balance Principal The Paid For the Year Interest Paid For the Year Closing Balance
1st Year 3,500,000 25,671 301,748 3,474,329
2nd Year 3,474,329 27,982 299,437 3,446,347
3rd Year 3,446,347 30,500 296,919 3,415,847
4th Year 3,415,847 33,246 294,173 3,382,601
5th Year 3,382,601 36,238 291,181 3,346,363
6th Year 3,346,363 39,500 287,919 3,306,862
7th Year 3,306,862 43,056 284,363 3,263,807
8th Year 3,263,807 46,931 280,488 3,216,875
9th Year 3,216,875 51,156 276,263 3,165,719
10th Year 3,165,719 55,761 271,658 3,109,959
11th Year 3,109,959 60,780 266,639 3,049,179
12th Year 3,049,179 66,251 261,168 2,982,928
13th Year 2,982,928 72,214 255,205 2,910,714
14th Year 2,910,714 78,714 248,705 2,832,000
15th Year 2,832,000 85,800 241,619 2,746,200
16th Year 2,746,200 93,523 233,896 2,652,677
17th Year 2,652,677 101,941 225,478 2,550,736
18th Year 2,550,736 111,117 216,302 2,439,619
19th Year 2,439,619 121,119 206,300 2,318,499
20th Year 2,318,499 132,021 195,398 2,186,478
21st Year 2,186,478 143,905 183,514 2,042,573
22nd Year 2,042,573 156,859 170,561 1,885,714
23rd Year 1,885,714 170,978 156,441 1,714,736
24th Year 1,714,736 186,368 141,051 1,528,368
25th Year 1,528,368 203,144 124,275 1,325,225
26th Year 1,325,225 221,429 105,990 1,103,795
27th Year 1,103,795 241,361 86,058 862,435
28th Year 862,435 263,086 64,333 599,348
29th Year 599,348 286,768 40,651 312,581
30th Year 312,581 312,581 14,839 0
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What is Pre-EMI on home loan?

Pre-EMI is a payment option offered to home loan borrowers purchasing a property under construction. Equated Monthly Instalment (EMI) consists of two components - the Principal component and the Interest component. Pre-EMI is nothing but the interest part of the disbursed home loan that you are required to pay until the bank disburses the entire loan amount. Your house loan acts as an interest-only loan on the released amount until the property has been completely constructed. The EMI payment process starts only after the pre-EMI phase is completed.

For example, if you are borrowing a loan of Rs.40 lakh at an interest rate of 10.5% for a period of 20 years for a property under construction. The bank will usually disburse the loan amount in the following manner:

Month January July October December
Amount Disbursed Rs.10 lakh Rs.10 lakh Rs.10 lakh Rs.10 lakh
Pre-EMI Rs.8,750 Rs.17,500 Rs.26,250 Rs.39,935
Stage On agreement On completion of the initial phase On completion of the next phase On completion of the final phase and possession

As per the table, you will be paying a pre-EMI of Rs.2,36,250 i.e., (26250 x 3) + (17500 x 3) + (8750 x 6) as interest for the amount disbursed by the bank. You will have to begin paying your EMI of Rs.39,935 for the next 20 years after the final loan amount has been disbursed.

However, a wiser option would be to opt for a full EMI payment as it ensures that you have already paid down a portion of the remaining loan amount at the time of possession.

What is home loan EMI?

EMI stands for Equated Monthly Installment. A home loan EMI is a calculated repayment amount a borrower has to make in order to pay down his debt on the home loan as per the amortisation schedule every month. One can always evaluate his/her EMI plan on a home loan EMI calculator before getting a loan.

How are home loan interest rates calculated?

Home loan interest rates are generally computed on a daily basis and charged together at the end of the month. Your outstanding loan amount is taken into consideration at the end of each working day and is multiplied by the interest rate applied on your home loan. The amount is then divided by the number of days in the year (365 or 366 days in case of a leap year).

How to calculate your monthly interest?

Interest rates are usually expressed annually. Divide the interest rate you are offered by the number of payments you will make during the year, i.e., 12. Multiplying it with the outstanding loan amount will give you the interest you pay for the month.

How much home loan can I afford?

There are various factors that influence the amount of home loan you can afford. Your income, expenses, lifestyle and attitude towards debt, all play a major role in deciding your loan amount. Ideally, it is advised to refrain yourself from utilising more than 40% of your monthly gross income on home loan EMIs. Since home loans are long term commitments, it is strongly advised to go through your financials before applying for it. Consider using a home loan calculator to make sure you are financially strong to make your EMIs without any hassle.

What is home loan prepayment?

A prepayment is an EMI payment settlement made before its official due date. You can either pay the entire outstanding balance or pay in advance for an upcoming EMI payment. This can help you reduce your EMI for the remaining period or cut down your loan tenure if you opt for the same EMI. The prepayment amount should at least be three times your EMI amount. Using a home loan calculator with prepayment option can help you get an idea of how much money you can prepay at a time. However, it is advised to go through your home loan documents for any clauses that indicate prepayment of the loan can attract penalties.

Types of home loans available in India

In India, both private and national banks offer various home loan options to customers to help them choose the best home loan based in their requirements. Here are some of the most common type of home loan available in India.

  • Home-purchase loan: This loan is suited for customers who are looking to buying a residential property. The interest rates applied to these loan can either be floating, fixed or hybrid. The borrowers can avail up to 85% of the market value of the property from the bank.
  • Land-purchase loan: These loans are given to applicants who are looking to buy a plot for the purpose of constructing a house. Banks usually lend up to 85% of the plot value in this case.
  • Home-extension loans: This loan is suited for those who wish to expand their existing house. Some banks categorise this loan based on the reason why the current house is being extended.
  • Home-construction loans: The loan is issued to applicants who wishes to build a house on a plot owened by the person. The plot can also be co-owned by the applicant to get a loan.
  • Home-conversion loans: For existing home loan borrowers who are looking to move into another house, home-conversion loan is the best option.
  • NRI-home loans: These are specialised home loans for NRIs looking to purchase residential property in India.
  • Home-improvement loans: The loan is usually taken by applicants who already own a house but lack financial support to improve or renovate the house.

Types of home loan interest rates

Generally, there are three types of interest rates that can be applied on home loans:

  • Fixed home loan interest rate: These interest rates remain unaltered despite market fluctuations during the entire loan tenure.
  • Floating home loan interest rate: Loans offered on floating interest rates are subject to a base rate and floating element. Hence, market fluctuations leading to a change in the base rate tend to alter the interest rate offered on the home loan. However, a floating rate home loan is comparatively cheaper than the fixed rate home loan.
  • Hybrid home loan interest rate: A hybrid rate home loan offers applicants the option to buy a home of their choice with nominal interest rates, flexible tenure and loan amount up to Rs.10 crore. Borrowers can also make prepayments with no additional penalties incurred on the home loan.

Eligibility for home loan

You can always check your eligibility by using a home loan calculator as a guide to understand your financials before applying for a home loan. This will give you an idea on the loan amount you can be eligible for and the EMI payments you will have to make before approaching a bank for the loan.

Key factors impacting home loan interest rates

When lending buyers home loans, banks and financial institutions take various factors into consideration which setting home loan interest rates. Here is a list of factors that go into deciding the lowest rate of interest rate offered by the banks.

  • Repo Rate: Repo rate is defined as the rate at which the RBI lends funds to the banks. The Reserve Bank of India (RBI) uses repo rate as a financial instrument to keep inflation under control. An increase or decrease in the repo rate by the RBI will impact homebuyers with banks being forced to revise its home loan interest rates for its customers.
  • Reverse Repo Rate: Reverse Repo Rate is defined as the rate at which the RBI borrows funds from the banks. It is another type of financial instrument implemented by the RBI to control the pace of money supply. A change in reverse repo rate will have a direct impact on the home loan interest rates.
  • MCLR: Marginal Cost Fund based Lending Rate (MCLR) is the base rate below which the banks are not allowed to grant loans to applicants. The banks will have set benchmark MCLR for various loan tenors such as one-year, six-month, three-month, one-month and overnight tenors. The MCLR was implemented to ensure transparency in the credit market and that customers receive the lowest cost of funds from the banks.
  • Cash Reserve Ratio (CRR): Cash Reserve Ratio can be defined as the fraction of total deposits of customers which the banks are supposed to hold as reserves with the Reserve Bank of India (RBI). It plays a vital role in controlling the money supply chain in the economy. The CRR makes sure that the banks do not run out of money when meeting the requirements of the customers.

7 Benefits of Using Home Loan EMI Calculator

  1. Offers Breakup of Various Finance Charges: Using the home loan calculator also helps in understanding various financial charges such as total interest paid & processing fee value. Since banks and financial institutes present them as a percentage of the principal amount, knowing the actual value helps immensely in deciding the terms of the loan.
  2. Comparing Loan Offers: You can use the home loan calculator to compare the financials involved in loan offers from various banks. Provide the required inputs on the basis of offer made from different banks, get the results, jot them down and compare. You can decide to sign up for the most feasible one which offers the lowest rates and charges.
  3. Helps in Choosing the Loan Terms: Knowing the EMI value also helps in choosing the terms of the loan such as tenure of the loan. If a shorter term means a higher EMI, you can try various combinations of available tenures and work out suitable terms that match your monthly income and budget.
  4. Helps in Loan Management: If you're in the middle of repaying a housing loan and would like to revisit the financials with a specific motive such as paying off the loan before the term ends, using the home loan EMI calculator helps in making decisions in this regard.
  5. Helps in Validating Information: (Cross-Check Amortisation Schedule) If you are negotiating a home loan deal with the bank, you can cross verify the schedule provided by the bank by using the home loan EMI calculator to get the amortization table details. If the numbers mismatch, you can contact the bank and get them clarified.
  6. Saves Lots of Time: With an online home loan EMI calculator, you don't have to waste time performing manual computation. Manual calculation can take time and be difficult to see through till the end. Human error is another disadvantage of manual computation of the EMI on your home loan.
  7. Easy Process: You only have to enter the loan amount, interest rate, and loan tenure in the tool, the actual computation will be taken care of by the home loan EMI calculator.

While computing the Home loan EMI, taking inflationary and deflationary scenarios of floating interest rate into account, you will be better prepared to meet the outcome. Depending on the EMI, you can opt for prepayment of your home loan.

5 Factors that Affect your Home Loan EMI

  1. Loan Amount:The principal is the loan amount borrowed from the bank. It is used to determine the total cost of the loan. Higher the loan amount, higher the EMI.
  2. Interest Rate:The interest rate for home loans differ from bank to bank. Higher the interest rate, higher the EMI. It is advisable to do some research and choose a bank that offers the lowest interest rate. Lower the interest rate, lower the cost of your home loan.
  3. Loan Tenure:The time taken to repay the loan amount is called loan tenure. Longer the loan tenure, lower the EMI. Loan tenure is determined based on your age at the time of borrowing and your retirement age. In India, the longest loan tenure available across banks is 30 years.
  4. Processing Fee: This value, assigned in terms of the percentage of loan amount, is the agreed upon processing fee applicable to the loan product. If you aren’t sure about this value, kindly consult your loan related documents or consult the appropriate resource at your loan lender.
  5. Pre payments: Usually, many home loan subscribers prefer to make pre-payments on their home loan. This point is given due consideration in the EMI calculator for housing loans as available on BankBazaar.com. Make your choice by opting for the yes/no toggle that is provided as the final input in the tool.

How Does Home Loan EMI Payment get you Tax Benefits?

Paying EMIs every month can be hard on your bank account. You have to prepare a monthly budget to save money after paying your bills, EMIs, and meeting any unexpected financial requirements. Fortunately, the government of India offers tax benefits to Indian nationals on home loan repayments to incentivise home loans. The following are the various tax benefits you can get with regards to home loan repayments:

  • Under Section 80Cof the Income Tax Act, 1961, you can avail tax deduction of up to Rs.1.5 lakhs per financial year towards the principal repayments made on your home loan.
  • Under Section 24of the Income Tax Act, 1961, you can avail tax deduction of up to Rs.2 lakhs per financial year towards the interest payment on your home loan.
  • Under Section 80Cof the Income Tax Act, 1961, you can avail tax deduction on stamp duty charges and registration charges.
  • Under Section 24of the Income Tax Act, 1961, you can avail tax deduction on processing fees, prepayment charges, and service fees.

Tax deduction is applicable only if the home loan is used to purchase or construct a home. You can claim tax benefits only when the construction is completed or you have taken possession of the home. There is no tax benefit for property under construction. Tax deduction is not applicable to a home loan taken for repair, reconstruction or renovation.

What is the Impact of Part Payments on EMI?

If you have a lump sum amount of money, you can use it to make part payment on your home loan. Part payment made towards principal repayment can bring down your EMI or reduce your loan tenure. Lower EMI means that you can save on interest payments. For part payments to make that much of an impact on your EMI, the part payment has to be significantly large. You make more than one part payment. However, not all banks allow part payments.

Is the Home Loan EMI Fixed or Can It Change in Future?

Home loan EMI is fixed but there are certain circumstances under which it can change such as:

  • Rise in Floating Rate of Interest on Your Home Loan: Whenever the RBI announces repo cuts and there is a change in the floating rate of interest, the bank will increase the loan tenure while keeping the EMI same. If the new loan tenure exceeds the permissible number, then the bank may increase your EMI amount.
  • Flexible EMIs: If you have opted for flexible EMIs such as step-up or step-down EMIs, then there will be a change in your home loan EMI over the loan tenure. In the case of step-up EMI, your home loan EMI will increase with each repayment. In the case of step-down EMI, your home loan EMI will decrease with each repayment.
  • Partly Disbursed Loan: In the case of partly disbursed loans, the EMI is bound to increase with each disbursement.
  • Loan Prepayment: If you decide to prepay your loan, the outstanding balance will reduce and so will your EMI. You can either choose to reduce the EMI for the same loan tenure or reduce the loan tenure while keeping the EMI same. However, the latter is found to be beneficial.

How is Floating Rate home loan different from Fixed Rate Home Loan?

When deciding on a housing loan, you must consider whether you want to opt for a floating rate or fixed rate loan. The loan amount and loan tenure can be determined by you, the borrower, but the rate of interest on your home loan is determined by the bank based on the RBI's policies and rules.

Therefore, it is advisable to use home loan calculator and while doing so, one must keep two scenarios in mind. The rate of interest can either increase or decrease during the loan tenure. Accordingly, your home loan EMI will also change. Borrowing a home loan is a long-term commitment that can span years. In the case of a floating rate loan, when there is a decrease in home loan interest rate, you will benefit. In the case of a fixed rate loan, as the rate of interest is fixed throughout the loan tenure, even if the home loan rates are slashed you will not benefit from it. When you take the effort to determine how much EMI you will have to pay under these 2 circumstances prior to borrowing a home loan, you have the opportunity to change your loan amount and loan tenure to make the EMI more affordable to you.

How to calculate your home loan EMI using Excel sheet

Using an excel spreadsheet to calculate your home loan EMI is a simple method. In order to do so, three variable of a housing loan is utilised, namely, rate of interest, period, and loan amount. It must be noted that the rate of interest should be calculated on a monthly basis. For example, if the rate of interest is 12%, it should be calculated as 12%/12 = 1%. The period represents the total number of EMI payable.

In order to calculate EMI, click on the “=” symbol, type ‘PMT(the rate of interest, period, loan amount)’, and click enter. The excel sheet will the produce an amount in a negative value. This indicates the cashflow that the borrower will have to incur. This is the EMI that a home loan borrower would have to pay.

For example if your loan amount is Rs.5 lakh for 2 years at 12% p.a., the formula to calculate EMI is as follows.

=PMT(12%/12, 24, 500000)

How to calculate home loan EMI using mathematical formula

In order to calculate your home loan EMI using the mathematical formula, you would require to know the loan amount, the rate of interest per month, and the total number of EMIs payable. The formula to calculate EMI is as follows.

EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P = the principal amount, r = the rate of interest per month, N = total number of monthly instalments.

How to calculate home loan EMI using EMI calculator

Thanks to technology integrated in finance, it is easy to calculate the EMI on a particular loan. Simply visit a site that allows you to use a EMI calculator, enter the basic details of your loan. The site will then mention the total EMI you have to pay towards the loan. Some calculators will also break down the principal and interest aspect of the EMI.

Now that you understand how to calculate EMI, ensure that you understand the financial outflow you need to endure in order to pay off the loan. If the EMI is going to be a burden to you, reconsider your loan option.

What is Pre-EMI on a Home Loan and How is It Different from Regular EMI?

For partly disbursed home loans, you can make pre-EMI payments, wherein you are only paying interest payments until the full loan amount is disbursed.

Regular EMI consists of both the interest payment and principal repayment. Regular EMI commences only after the full loan amount is disbursed.

The following are the benefits of paying pre-EMI:

  • If you are staying in a rented property, it can be difficult to manage both EMI and rent payments every month. By opting for Pre-EMIs, it can be easier to manage your monthly finances.
  • Under Section 80C of the Income Tax Act, 1961, you can get tax deductions on principal repayment of home loan once the construction is complete. In the case of Pre-EMI option, you commence principal repayment only after the completion of property construction.
  • Pre-EMI interest payment is payable only on the disbursed loan amount.
  1. Must I signup on BankBazaar.com or have a housing loan procured for using home loan emi calculator?

    No. This home loan repayment calculator is 100% free to use and no specified conditions exist to qualify for its usage. As a visitor to BankBazaar.com, you can access the page directly and compute your housing loan EMIs.

  2. I don't know the processing fee applicable to my housing loan. What should I do?

    You should be able to get this information from the loan related documents issued by your bank. Alternatively, you can search for this detail on the bank's official website, or by personally contacting the bank's customer support department.

  3. What are some of the tips and tricks associated with this home loan calculator?

    Immediately below the EMI calculation, you can see details of your housing loan EMI breakup, Your Amortization Details (Yearly/Monthly), a graphical representation of the amortization details associated with your house loan.

  4. Do I need to verify the results of of my calculations with the bank for accuracy?

    Well, it makes sense to do so even though our calculator is accurate. There may be slight changes, owing to the way your bank calculates the EMI. Also, your installment may include other monetary components which you were probably not aware of, while using the tool. Therefore, make sure to cross check before making critical decisions.

  5. Is the EMI calculator available on your mobile app?

    Yes, you can use find this calculator available on our apps.

    Tap the left hand top navigation – Finance Tools >> Locate the EMI Calculator. Bankbazaar mobile apps are available on both Android and iOS platforms.

Home Loan Processing Fee

Home loan processing fee is a fee payable to the bank or lender that provides you with a home loan. This fee is typically a percentage of the total loan amount, or a fixed amount, depending on the lender. It is collected during the initial payment of the loan and is mostly used for administrative charges.

Read more about Home Loan Processing Fee

Home Loan Prepayment

Home loan prepayment is a process wherein the home loan borrower pays over and above the expected repayment amount during a particular month. This yields several benefits like reducing the overall interest payable, reducing the tenure of the loan, etc.

Read more about Home Loan Prepayment

Home Loan Tax Benefit

Home loans are qualified for tax benefits under three different sections of the Income Tax Act. . An individual with a home loan can avail tax rebates and ease the tax burden he/she pays annually. Tax benefits can be availed on both the principal and interest amount of the home loan.

Read more about Home Loan Tax Benefit


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News About Home Loan EMI Calculator

  • HDFC Home Loan EMIs to get More Expensive

    HDFC has announced that their retail prime lending rate (RPLR) will be increased by 20 basis points. As of April 1st, the RPLR will go up to 16.35%. The rate of interest on home loans of up to Rs.30 lakh has been increased to 8.45% p.a. For home loans that range from Rs.30 lakh – Rs.75 lakh, the rate of interest will now be 8.60% p.a. All loans above Rs.75 lakh will attract a rate of 8.70% p.a. However, for female borrowers, the rate of interest is 5 basis points lower than that of male borrowers. For loans up to Rs.30 lakh, the rate of interest is now 8.40%, while loans that range from Rs.30 lakh – Rs.75 lakh will attract an interest rate of 8.55%. All loans above Rs.75 lakh for women borrowers will attract an interest rate of 8.65% p.a.

    11 April 2018

  • Smart Ways to Reduce Housing Loan Burden

    There are various ways of reducing your home loan burden and one such way could be option for a home loan balance transfer. When you transfer the home loan from one bank to another for better terms and conditions, you can save a great deal in the long run. You intend to opt for a home loan balance transfer when you realize that a different lender can offer you better perks and lower rates of interest with your home loan. When you transfer the home loan, your previous lender’s debt is settled by your new lender and a new account is opened with the new lender. You will to repay the loan (outstanding) to the new lender at the new rate of interest. Some of the other ways to reduce home loan burden include using your annual bonus wisely and opting for a longer home loan tenure. When you get a bonus from your employer, use to make extra payments towards your monthly instalments. This is substantially bring down the amount that you need to repay, in turn making things easier for you in the long run. Also, you may choose for a longer tenure with your home loan. You will have to pay lesser amount every year if you choose a home loan tenure of 30 years instead of 20 years. However, you must understand that when you choose a longer tenure you pay lesser every month but in turn pay more interest over the whole loan tenure.

    29 March 2018

  • With Hike in MCLR, Rate of Home Loan EMIs Expected to Increase

    Banks across India have begun to increase their interest rates hinting towards a change in the home loan rates. This is going to be a first in the last two years when rates are being revised. State Bank of India, the country's largest lender and ICICI Bank, a major banking corporation in the private sector have increased their lending rates by up to almost 20 bps. This move is being considered to be a move that will rise equated monthly instalments for car and home loans for its customers. The interest garnered on home loans is connected to the MCLR of the bank. With an increase in the MCLR, the home loan rates will mostly also rise. However, if the banks reduce the margin or the mark-up in the loans, the rates will continue to remain the same.

    The deposit rates of Punjab National Bank and the SBI have been increased by almost 50 bps throughout various projects. According to a recent notification, SBI, that has more than a fifth of the country’s banking assets has increased the main one-year MCLR to 8.15% from 7.95%. This I the first increase in the one-year MCLR since this concept was launched for the new lending rate system last year.

    9 March 2018

  • Borrowers Might Default on Home Loans EMIs

    According to the report from the government, there are high chances of borrowers defaulting on home loan EMIs even as the government policies give huge thrust to affordable housing. Crif Highmark said in a report that in November 2017, 2.33% of the home loans under Rs.25 lakh were not repaid on time.

    Home loans under Rs.10 lakh, 4% of the borrowers do not pay the EMIs on time. Since the government expects to meet its target of housing for all in 2020, a slew of sops were given to the affordable housing sector, which includes addition in the priority sector lending, introduction of tax benefits under section 80-IA, and concessions on long-term capital gains tax provisions.

    The 90-day overdue for the affordable housing sector stood at 1.36% for March 2016 and has been rising since. New Delhi, Uttar Pradesh, and Tamil Nadu have the highest stress in the housing finance sector, while Kolkata, Chennai, and Ghaziabad have the highest stress in affordable housing segment.

    5 March 2018

  • Will EMI on House Property reduce Tax Flow?

    Property prices have been increasing presently and the bandwidth on the yearly deduction of tax on home loan interest is currently Rs.2 lakh. The finance ministry may however consider reducing the threshold from Rs.2 lakh to Rs.1.5 lakh.

    Additionally, the fresh amendment of limiting the loss on house property up to Rs.2 lakh from all properties whether it is self-occupied or rented seems to be impractical considering high prices of the property and interest rates as well. This has also discouraged many salaried class people to invest in more than one property and seems to have impacted real estate investors significantly.

    9th January 2018

  • SBI’s New Year Bonanza: Base Rate Reduced by 30 Basis Points, Waiver on Home Loan Fee Extended

    State Bank of India (SBI) reduced its base rate and benchmark prime lending rates (BPLR) at the start of the year for its existing patrons. The base rate was cut by 30 basis points and these changes are effective from January 1.

    In addition to this, the bank also issued a statement saying that it would extend its current waiver on processing fee for home loan till Saturday, March 31. This benefit can be enjoyed by new customers and also by those who are switching their loans to SBI from other banks.

    The revised base rate now stands at 8.65 percent while the BPLR is 13.40 percent.

    This move is set to benefit more than 8 million customers and other banks are expected to follow the suit.

    2nd January 2018

  • Home Loan Growth Weakens owing to GST, RERA

    Home loan growth recently witnessed one of the largest falls in the last five years, as per the data revealed by the Centre for Monitoring Indian Economy. Between April-October 2017, home loan expansion fell by 32.7 percent in comparison to 2016.

    In the same term last year, home loan growth was falling by 4.27 percent.

    Even though the interest rates have been cut down, buyers are not paying any heed to the appeal owing to a slow execution of the recently launched Real Estate (Regulatory and Authority) Act across the country. Moreover, the dilemma over how the Goods & Service Tax (GST) will affect the housing prices has also contributed to the recent slump in the housing industry.

    The first few months of the year were also reeling from the effect of demonetisation, which led to a drop in supply and demand in the overall market.

    28th December 2017

  • Repco Home Finance is expecting improvement in affordable housing sector

    In a recent interview, R Varadarajan, the MD of Repco Home Finance and Nidhesh Jain of Investec Capital Services, stated that in the affordable housing finance sector they are expecting huge demand as a number of private companies are coming forward. They are hopeful that by FY19 the affordable housing sector will see lots of improvements. According to Nidhesh Jain, Housing finance sector has shown consistent 20% growth without any issues related to quality of assets and the duo are quite hopeful about this sector. HDFC Ltd. tops their preference in this sector.

    Talking about the bank interest rates, Repco MD said that the bank funds are available at cheaper rate now than before. He further added that the yields of bonds have increased by 53 basis points and became 7.19% in Q3FY18. As per his anticipation, the cost of funds for NBFCs (Non-banking financial companies) might get affected by the hardening of bond yields. The duo also said that their cost of fund has decreased recently as most of the banks in India has slashed their MCLR.

    15th December 2017

  • Home Loan and Car Loan EMIs Unlikely to Come Down Soon

    With the country’s apex bank deciding to keep the policy rates unchanged, the Equated Monthly Installments (EMIs) on home loans and cars loans are unlikely to come down in the near future. In the wake of the decision, officials from banks like Bank of Baroda, State Bank of India and others have come forward with statements stating that there won’t be any change in the existing rates. The Managing Director, Global Markets, State Bank of India stated that while the lending rates can still go down considering banks lower their deposit rates but to expect deduction in marginal cost-based lending rates (MCLR) is limited.

    13th December 2017

     
  • Home loan Defaults Rise in 2 years

    Housing and auto loans have seen an increase in defaults over the period of two years. In other words, borrowers have failed to pay off the loan on a timely basis. Two-wheeler and gold loans have however seen a reduction in defaults.

    Defaults in the PSU banks have shown an increment, which can be linked to the higher percentage of home, loans within this sector. For other non-banking financial institutions and private banks, defaults showed a downward trend even though these organizations showed a higher disbursement rate in the last few years. The retail lending of these banks also grew from around 14% to 19% since 2014.

    29th November 2017

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