Calculate your Home Loan EMI & Total Interest Due
Monthly amount paid to your Home Loan provider
Your debt repayment schedule in regular instalments over a period of time.
|Year||Principal Paid(A)||Interest Paid(B)||Total Payment (A+B)||Outstanding Loan Balance||Pre-payment|
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:
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 amortisation schedule presents you with the following details:
With the amortisation table, you get to know exactly when your loan repayment comes to an end.
Formula for home loan EMI calculation:Equated Monthly Installment (EMI) = P x r x (1+r)^n/((1+r)^n -1)
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.
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|
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:
|Amount Disbursed||Rs.10 lakh||Rs.10 lakh||Rs.10 lakh||Rs.10 lakh|
|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.
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.
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).
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.
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.
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.
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.
Generally, there are three types of interest rates that can be applied on home loans:
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.
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.
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.
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:
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.
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.
Home loan EMI is fixed but there are certain circumstances under which it can change such as:
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.
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)
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.
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.
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:
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.
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.
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.
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.
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 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.
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.
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.
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Home loan is a great borrowing option for individuals who want to buy a home without exhausting their capital. Several banks and NBFCs offer home loans to the eligible borrowers at a low-interest rate. However, many times the applicants face rejection while applying for a home loan. The lenders check various factors like income, age, credit score, repayment capacity etc. of the applicant before approving a loan request. However, there are certain ways to increase the approval chances. Paying higher down payment, applying with a co-borrower having a good credit history, and choosing a longer loan tenure are some tips to reduce rejection. Moreover, by reducing one's FOIR to 40% to 50% and building a robust credit score can also help to improve the chances of a home loan application approval. One should also avoid applying for multiple home loans within a short period of time to increase his/her creditworthiness.
14 January 2019
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
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
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
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
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.
9 January 2018
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.
2 January 2018
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.
28 December 2017
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.
15 December 2017
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.
The decision to keep the policy rates unchanged was taken based on concerns like inflation and upside risks. It needs to be mentioned that prior to the Monetary Policy Committee meeting, wholesale prices based inflation hit a six month high of 3.59 percent while retail inflation was at a seven month high of 3.58 percent.
13 December 2017