A "low interest" loan shouldn't mean you have very little interest in paying it back!

Home Loan EMI Calculator

Recalculate your Home Loan EMI and Total Interest Due in a snap!

Your Home Loan Details

Use the slider to alter your Home Loan details.

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

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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Home Loan EMI Calculator

The cost of a home loan is calculated in terms of EMIs. If your home loan EMI is more than you can afford to pay each month, you can reduce your loan amount accordingly. This is why, it is important to calculate EMI prior to borrowing a home loan. Home loan EMI calculation has become easier now as most banks provide online EMI calculators on their websites for easy computation. You can also visit third-party sites such as the BankBazaar website to calculate your home loan EMI.

What is Home Loan EMI?

Owning a home is most everyone's dream. Savings alone will not be sufficient to buy or build a home. Most of us rely on home loans to make our dream come true. Home loan EMI or Equated Monthly Installment is a fixed amount that you pay every month over a fixed period of time in order to repay the loan amount that you had borrowed from the bank. EMI is made up of 2 components:

  • The principal amount you borrowed, and
  • The interest rate on that borrowed amount

EMI is divided across each month over the loan repayment period.

Process to Calculate Home Loan EMI

The EMI of your home loan can be calculated using 4 major factors such as:

  1. Principal Amount
  2. Interest Rate
  3. Loan Tenure
  4. EMI Computation Formula

The basic formula to calculate EMI is as follows:

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

With the online EMI calculator, you are no longer required to do manual calculations.

  1. First Visit the BankBazaar Site
  2. Enter the Loan Amount You Require
  3. The Rate of Interest Offered By The Bank
  4. The Loan Tenure to Calculate Your EMI on Home Loan

In addition to the principal amount and interest, EMI also includes processing fees charged by the banks to process your loan. It is usually a small percentage of the principal amount. Most borrowers prefer to make prepayments on home loans. Therefore, the BankBazaar EMI calculator takes the prepayments into account while computing the EMI on your home loan.

How Does BankBazaar Housing Loan EMI Calculator Work?

Home Loan EMI Calculator

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 calculator. All you have to do is enter 3 main components to calculate the EMI on your home loan:

  • Loan amount
  • Loan tenure
  • 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 EMI calculator is also available on the BankBazaar mobile app.

Current Home Loan Interest Rates – August 2017

Bank Name Home Loan Interest Rates Home Loan Amount Processing Fee
Axis Bank 8.35% to 11.75% Min. - 5 Lakhs Max. - 10 Crs 0.5% (min. ₹10,000)
Bank of Baroda 8.35% to 9.35% Min. - 1 Lakhs Max. - 2 Crs ₹ 7,500 to ₹20,000
Bank of India Men : 8.60% Women : 8.55% Min. - Depends on income Max. - 5 Crs ₹ 1,000 to ₹20,000
Canara Bank 8.45% - 8.65% Min. - Depends on income Max. - Depends on income ₹ 1,500 to ₹10,000
DBS Bank 8.40% to 8.45% Min. - 40 Lakhs Max. - 5 Crs 10,000 + applicable tax
Dena Bank 8.55% to 8.65% Min. - 20 Lakhs Max. - 1 Cr 0.5%
HDFC LTD 8.35% to 8.60% Min. - 5 Lakhs Max. - 10 Crs Up to 0.5% (max. ₹ 11,500)
ICICI Bank 8.40% to 8.75% Min. - 5 Lakhs Max. - 10 Crs 0.5% (min. ₹11,500)
State Bank Of India 8.40% to 8.75% Min. - 15 Lakhs Max. - 10 Crs 0.35% (max. ₹ 10,000) + GST
Punjab National Bank 8.60% to 8.95% Min. - 20 Lakhs Max. - Depends on income Up to 0.5% (min. ₹5750)
Indian Overseas Bank 8.55% to 9.05% Min. - Depends on income Max. - Depends on income ₹ 0.53% (max. ₹13,350)
Aditya Birla Housing Finance 8.55% to 8.99% Min. - 20 Lakhs Max. - 10 Crs ₹ 5,000 to ₹ 10,000 + GST
Aspire Home finance Corporation Limited 14.00% Min. - 2 Lakhs Max. - 25 Lakhs 2.00%
Au Housing Finance 12.50% to 17% Min. - 2 Lakhs Max. - 1 Cr 2.00%
IndiaBulls General Borrowers - 8.40% to 10.05% Women Borrowers - 8.35% to 10% Min. - 2 Lakhs Max. - 3 Crs Up to 0.5%
Sundaram BNP Paribas 8.35% - 9.25% Min. - 15 Lakhs Max. - 5 Crs 0.50% (min. ₹ 10000) + GST
Yes Bank 10.25% to 10.75% Min. - 5 Lakhs Max. - 5 Crs Up to ₹11,500

Example Home Loan EMI Calculation:

Consider that your home loan is Rs.25 lakh at an interest rate of 8.50% per annum, for a period of 360 months.

P = ₹ 25,00,000

R = [8.50/(12*100)] or [8.50/12/100] = 0.007083

N = 360 (30 years into months)

EMI = ₹ 25,00,000* 0.007083 * (1 + 0.007083)360 / ((1 + 0.007083)360 ? 1) = ₹ 19,223. i.e.,

The monthly installment that you would have to pay is Rs.19,223 for 360 months. Hence, the total amount payable is ,Rs.19,223 * 360 = Rs.69,20,280. This includes an interest of Rs.44,20,280 that you would be paying towards the housing loan.

We can use the home loan emi calculator to determine the equated monthly installments with different principal amounts and home loan interest rates. Listed below are five banks brief examples of the same.

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

Monthly EMI = Rs 27,285

Home Loan Tenure Opening Balance Interest Rate Applied EMI Paid For the Year Principal Paid For the Year Interest Paid For the Year Closing Balance
1st Year 3,500,000 8.65% 327,419 25,671 301,748 3,474,329
2nd Year 3,474,329 8.65% 327,419 27,982 299,437 3,446,347
3rd Year 3,446,347 8.65% 327,419 30,500 296,919 3,415,847
4th Year 3,415,847 8.65% 327,419 33,246 294,173 3,382,601
5th Year 3,382,601 8.65% 327,419 36,238 291,181 3,346,363
6th Year 3,346,363 8.65% 327,419 39,500 287,919 3,306,862
7th Year 3,306,862 8.65% 327,419 43,056 284,363 3,263,807
8th Year 3,263,807 8.65% 327,419 46,931 280,488 3,216,875
9th Year 3,216,875 8.65% 327,419 51,156 276,263 3,165,719
10th Year 3,165,719 8.65% 327,419 55,761 271,658 3,109,959
11th Year 3,109,959 8.65% 327,419 60,780 266,639 3,049,179
12th Year 3,049,179 8.65% 327,419 66,251 261,168 2,982,928
13th Year 2,982,928 8.65% 327,419 72,214 255,205 2,910,714
14th Year 2,910,714 8.65% 327,419 78,714 248,705 2,832,000
15th Year 2,832,000 8.65% 327,419 85,800 241,619 2,746,200
16th Year 2,746,200 8.65% 327,419 93,523 233,896 2,652,677
17th Year 2,652,677 8.65% 327,419 101,941 225,478 2,550,736
18th Year 2,550,736 8.65% 327,419 111,117 216,302 2,439,619
19th Year 2,439,619 8.65% 327,419 121,119 206,300 2,318,499
20th Year 2,318,499 8.65% 327,419 132,021 195,398 2,186,478
21st Year 2,186,478 8.65% 327,419 143,905 183,514 2,042,573
22nd Year 2,042,573 8.65% 327,419 156,859 170,561 1,885,714
23rd Year 1,885,714 8.65% 327,419 170,978 156,441 1,714,736
24th Year 1,714,736 8.65% 327,419 186,368 141,051 1,528,368
25th Year 1,528,368 8.65% 327,419 203,144 124,275 1,325,225
26th Year 1,325,225 8.65% 327,419 221,429 105,990 1,103,795
27th Year 1,103,795 8.65% 327,419 241,361 86,058 862,435
28th Year 862,435 8.65% 327,419 263,086 64,333 599,348
29th Year 599,348 8.65% 327,419 286,768 40,651 312,581
30th Year 312,581 8.65% 327,419 312,581 14,839 0

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

Monthly EMI = Rs 23,387

Home Loan Tenure Opening Balance Interest Rate Applied EMI Paid For the Year Principal Paid For the Year Interest Paid For the Year Closing Balance
1st Year 3,000,000 8.65% 280,645 22,004 258,641 2,977,996
2nd Year 2,977,996 8.65% 280,645 23,984 256,661 2,954,012
3rd Year 2,954,012 8.65% 280,645 26,143 254,502 2,927,869
4th Year 2,927,869 8.65% 280,645 28,496 252,148 2,899,372
5th Year 2,899,372 8.65% 280,645 31,061 249,583 2,868,311
6th Year 2,868,311 8.65% 280,645 33,857 246,787 2,834,454
7th Year 2,834,454 8.65% 280,645 36,905 243,740 2,797,549
8th Year 2,797,549 8.65% 280,645 40,227 240,418 2,757,322
9th Year 2,757,322 8.65% 280,645 43,848 236,797 2,713,474
10th Year 2,713,474 8.65% 280,645 47,795 232,850 2,665,679
11th Year 2,665,679 8.65% 280,645 52,097 228,548 2,613,582
12th Year 2,613,582 8.65% 280,645 56,786 223,859 2,556,796
13th Year 2,556,796 8.65% 280,645 61,898 218,747 2,494,898
14th Year 2,494,898 8.65% 280,645 67,470 213,175 2,427,428
15th Year 2,427,428 8.65% 280,645 73,543 207,102 2,353,886
16th Year 2,353,886 8.65% 280,645 80,162 200,482 2,273,723
17th Year 2,273,723 8.65% 280,645 87,378 193,267 2,186,345
18th Year 2,186,345 8.65% 280,645 95,243 185,402 2,091,102
19th Year 2,091,102 8.65% 280,645 103,816 176,828 1,987,285
20th Year 1,987,285 8.65% 280,645 113,161 167,484 1,874,124
21st Year 1,874,124 8.65% 280,645 123,347 157,298 1,750,777
22nd Year 1,750,777 8.65% 280,645 134,450 146,195 1,616,327
23rd Year 1,616,327 8.65% 280,645 146,552 134,092 1,469,774
24th Year 1,469,774 8.65% 280,645 159,744 120,901 1,310,030
25th Year 1,310,030 8.65% 280,645 174,123 106,522 1,135,907
26th Year 1,135,907 8.65% 280,645 189,797 90,848 946,110
27th Year 946,110 8.65% 280,645 206,881 73,764 739,230
28th Year 739,230 8.65% 280,645 225,503 55,142 513,727
29th Year 513,727 8.65% 280,645 245,801 34,844 267,926
30th Year 267,926 8.65% 280,645 267,926 12,719 0

Factors Affecting Home Loan EMI

Listed below are the various factors affecting home loan EMI:

  • 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.
  • 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.
  • 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.
  • 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.
  • Pre payments: Usually, many home loan subscribers prefer to make pre-payments on their 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.

Formula to Calculate Home Loan EMI

Listed below is the basic formula to calculate your home loan EMI:

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

  • Where, EMI is the Equated Monthly Installment
  • P is the principal or loan amount,
  • r is the interest rate per month (the annual interest rate is divided by 12 to get the monthly interest rate), and
  • n is the number of monthly installments or loan tenure in months.

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

Benefits of the Home Loan EMI Calculator

Listed below are the various benefits if using a home loan EMI calculator:

Helps in Determining the Loan EMI Amount:

The primary benefit of using an Home Loan EMI calculator is that it helps in arriving at the EMI amount. By simply providing basic inputs such as loan amount, rate of interest and the loan term, you will be presented with an elaborate output which includes the EMI amount payable.

Offers Breakup of Various Finance Charges:

Using the 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.

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.

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.

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 EMI calculator helps in making decisions in this regard.

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 EMI calculator to get the amortization table details. If the numbers mismatch, you can contact the bank and get them clarified.

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.

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 calculator.

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:

  1. 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.
  2. 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.
  3. Partly Disbursed Loan: In the case of partly disbursed loans, the EMI is bound to increase with each disbursement.
  4. 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.

What is a 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.

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.

Components of the Home Loan Amortisation Table

The following are the components of a home loan amortisation table:

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

What is the Benefit of Calculating Home Loan EMI?

It is important to calculate EMI prior to borrowing a home loan as EMIs are an important component of any loan. Listed below are the benefits of calculating the EMI of your home loan prior to borrowing:

  • If the EMI exceeds your monthly budget, you have the opportunity to reduce the loan amount and loan tenure to make the EMI more affordable.
  • When you know how much EMI you have to pay each month, it helps you in preparing your monthly budget accordingly.
  • While computing the 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.

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.

How Does Home Loan EMI Payment Reduce Tax Obligation?

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 80C of 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 24 of 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 80C of the Income Tax Act, 1961, you can avail tax deduction on stamp duty charges and registration charges.
  • Under Section 24 of 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.

Home Loan Eligibility Calculator

Find out if you are eligible to borrow home loan from a bank of your choice by visiting the BankBazaar website. Alternately, you can also visit the bank's official website to calculate your eligibility with the online home loan eligibility calculator. Eligibility is determined based on the following factors:

  • Monthly Income
  • Age at the Time of Borrowing Loan
  • Retirement Age
  • Monthly Financial Obligations
  • Credit History and Credit Score

You can increase your eligibility by providing a family member with steady income as a co-applicant for the home loan.

Floating Rate EMI Calculation

When deciding on a home 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 calculate the EMI by keeping in mind the 2 scenarios where there can be a rise or drop in the rate of interest on your home loan. The rate of interest can either increase or decrease during the loan tenure. Accordingly, your 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.

FAQs on Home Loan Calculator:

  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.

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Further Reading

Top picks from our Financial Expert

News About Home Loan EMI Calculator

  • Repo rate cut making EMIs for car loan and home loan go down

    The repo rate has been cut by the Reserve Bank of India or RBI by 25 basis points. At present, then repo rate stands at 6%. This step will bring down the lending rates associated with car loans and home loans. According to the veterans of the finance sector, this can prove to be a gala time for the consumers as the equated monthly instalments for their loan are going to reduce substantially.

    The festivals have just started. The onset of the festival season means that offers will be rolled out by different lenders. This can bring the EMIs further down. The governor of the Reserve Bank of India hoped that the transmission of the lending rate cuts become effective in the other types of loans too. He wants this to happen with respect to the liquidity situation.

    7th August 2017

  • To Escape the Burden of Higher EMI, Home Buyers Should Avoid Buying Projects that are Nearing Completion

    Since the service tax has been increased from 15% to 18% according to the new GST law, there has been a lot of confusion about whether the home loan EMIs will become more expensive. The fact is, service tax was never charged on EMI, and thus, tax will not be deducted under GST. Hence, home loan EMIs will not increase after the implementation of GST. However, since the prices of the projects that are nearing completion might increase after the implementation of GST, higher EMIs on such properties can stress out the borrowers. People who are keen on buying a home should avoid near completion projects until all kinds of doubts about the EMIs are erased. Earlier, VAT and service tax of 5-6% were charged on the sale cost of the property. Now, this gets subsumed into the GST rate of 12%. On first look, the tax incidence under GST might appear to be expensive, making property more expensive. However, under the previous government, a lot of Central and State taxes-Central Excise Duty, VAT, and entry tax on construction material was being paid by the builders, which was then compensated from the consumers. After the implementation of GST, full input tax credit would be charged for offsetting the main rate of 12% that will decrease the effective rate by 5%.

    7th July 2017

  • Caveats Exist, But PF Funds Could be Utilised to Make Payments Towards EMIs for Home Loans

    The rules and regulations concerning the use of Provident Fund to make payments towards EMIs for home loans has been relaxed by the Employees Provident Fund Organisation, revealed a report from NDTV Profit. The ‘Housing for all’ project is what this scheme falls under, and it has a number of caveats. Previously, subscribers were allowed to withdraw provident fund to make payments towards home loans, or purchase land or houses. However, subscribers could only do this once they had made contributions for five years, and the amount of money that could be withdrawn could not exceed more than 36 months’ worth. However, this requirement has been lowered to three years, but subscribers will not be allowed to withdraw money. The report revealed that only the Employees Provident Fund Organisation will give the money to the housing agency, or a government authority, or a lender. The other prominent requirement of the scheme is that the subscriber will have to gain membership into a society that is registered for housing reasons, or a cooperative society, and either of these societies are required to have a minimum of 10 members.

    3rd May 2017

  • EMIs of home loans set to decline

    State Bank of India, one of the largest banks in India brought down their benchmark lending rate to 9.10%. This means there was a reduction of 0.15% in the benchmark lending rate. By doing it, they reduced the EMIs for all the borrowers.

    The minimum lending rate or base rate was 9.25% before. The base rate has been reduced by 0.05%. The BPLR or benchmark prime lending rate has also been reduced from 14% to 13.85%.

    10th April 2017

  • Save Rs.2,000 on every EMI towards home loans booked under the PM Awas Yojna (PMAY)

    The 'Housing for All' initiative announced by Prime Minister Narendra Modi has brought interest events in the realty sector of the Indian market. Since the announcement, people have been eager to know the benefits. The outcome of the initiative at this stage has been revealed that offers home loan interest subsidy to the middle-class taxpayers. Individuals applying for a home loan of Rs.9 lakh up to Rs.12 lakh will be eligible to apply for a home loan subsidy under the PM Awas Yojna (PMAY) scheme. An interest subsidy of 3% for loan amount up to Rs.9 lakh and 4% for a loan amount of Rs. 12 lakh or higher will be applicable for borrowers buying their first house. This subsidy can turn out to be a saving of Rs2,000 on EMIs every month towards the repayment of the loan.

    31st March 2017

     
  • Pay Off Your Home Loan EMI’s From EPF Account Soon?

    The government is planning an amendment to the Employees’ Provident Fund which will enable EPFO members to withdraw up to 90% of their funds towards down payments for homes.

    With over 4 crore Indians members of the EPFO at present, the amendment would benefit a large number of prospective home owners.

    The amendment will also allow subscribers to make EMI (Equated Monthly Instalments) towards their home loans from their EPF balance.

    To avail this scheme, however, the EPFO subscribers would need to form a co-operative society with a minimum of 10 members.

    The Union Law Minister informed Parliament of the decision and further stated that the EPFO member would be able to utilise their EPF balance to fund the purchase or construction of a dwelling house or towards the acquisition of a site.

    He further stated that withdrawal towards home loans would be enabled only for EPFO members who fulfil certain criteria, which would be made public shortly.

    21st March 2017

  • India Home Loan’s Credit Ratings Upgraded by Credit Analysis and Research Limited (CARE)

    n a recent announcement, India Home Loan revealed that its credit ratings were upgraded by Credit Analysis and Research Limited (CARE). Long-term bank facilities saw their credit rating improve from Care BB+ to Care BBB-. The upgrade was considered by CARE following the recent progress made by India Home Loan with regards to its financial and operational performance. As a result, India Home Loan has moved up by almost 1% on the National Stock Exchange, and in just one year, 157% returns have been achieved by stocks.

    13th March 2017

  • SBI may see lower EMIs for new home loan borrowers

    From 1st April, banks began pricing their lending rates based on MCLR. Since RBI holds the interest rates by maintaining the repo rate at 6.25%, banks may see lower EMIs for borrowers. In a temporary measure, RBI had raised the CRR for banks to 100% of their deposits to absorb excess liquidity post demonetisation. Rajnish Kumar, MD of SBI, has said that with the withdrawal of incremental CRR requirement from 10th December, banks can bring down MCLR.

    SBI loan borrowers are locked into the MCLR for a year. Borrowers can switch their loans to lenders to avail lower EMIs. Soumya Kanti Ghosh, Chief Economic Adviser at SBI, has said that even if withdrawal restrictions are lifted, banking sector could see a gain of Rs.1.5 lakh crores through new deposits. In November, SBI cut its home loan rate for new borrowers to a 6-month low to 9.15%.

    22nd December 2016

  • RBI holds policy rates but excess liquidity in banking system may help home loan borrowers

    Although RBI hasn’t reduced policy rates (6.25%), excess liquidity in the banking system may help new home loan borrowers (who take loans post demonetisation) with lower EMIs. After demonetisation, banks have been flooded with deposits of nearly Rs.5.12 lakh crores, while the withdrawals have been Rs.1.3 lakh crores only. There has been a delay in rate cut because the return on the savings account will remain an outflow for banks, impacting their cost of funds. Another reason RBI holds rates may be because the US Fed rate is expected to be hiked, triggering dollar outflows, and resulting in the weakening of the rupee.

    All home loans taken after 1st April, are now linked to the bank's MCLR. Lower MCLR rates can be expected. Currently, the 12-month MCLR for most banks is in the 9.05 to 9.45 % range. After the mark-up, the actual home loan rate is around 9.35%. Even after the expected rate cut by RBI in February 2017, borrowers can expect a waiting period of 1 year before they see an impact on their EMIs.

    19th December 2016

  • RBI relaxes loan payment norms

    Due to the demonetization of the Rs.500 and Rs.1,000 currency notes borrowers are finding it hard to repay their loans. Keeping this in mind the Reserve Bank of India (RBI), in an effort to assist borrowers, banks and financiers has given an additional 60 days to declare certain loans of up to Rs.100 lakh as bad loans. The revised norms will also be applicable to running working capital accounts with a limit of Rs.1 crore, term loans with a limit of Rs.1 crore, housing loans, agricultural loans, loans sanctioned by Non-banking Financial Companies (NBFCs), loans extended by District Central Cooperative Banks (DCCBs). The relaxed dispensation will be applicable to loans payable between November 1st and December 31stt.

    5th December 2016

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