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|
If you’re planning to apply for a home loan, there are various things you need to keep in mind, most of all, your Equated Monthly Instalment (EMI). BankBazaar brings you a unique tool to help you calculate the EMI of your housing loan. It is simple to use, free of cost, and helps you find out your monthly repayment amount in just a few steps. It has a user-friendly design and all you have to do is input your loan details.
The main inputs required are:
Apart from this, you can also mention the processing fee your lender charges along with any prepayment plans you have.
BankBazaar’s Home Loan EMI Calculator follows a step-by-step process to find out your EMI. Here’s how you can use it:
Step 1: Use the first slider to select the amount of loan you are looking for. You can do this by moving the slider to the appropriate amount. You can also enter the amount in the corresponding space if that is easier.
Step 2: Use the second slider to choose the tenure of the loan. Or you can enter the number in the given space.
Step 3: In the next section, enter the interest rate that your lender is charging you. For example, if you are given a quote of 10.55% p.a., enter the same here.
Step 4: In the next space, enter the processing fee applicable to your loan.
Step 5: The last section is regarding pre-payments. If you plan on making pre-payments during the loan period, choose “Yes” and give the necessary details. If you’re not making pre-payments, select “No”.
Step 6: Now, make sure that all the figures you’ve entered are correct and then click “Calculate”.
You should get your results in a few seconds. This will show you how much you’re expected to repay every month. In addition to this, the results will also show you how much interest you will pay over the period of your loan. You will also get a loan amortisation table clearly indicating how much interest and principal you will pay back each month.
This table is designed to show you every detail of your loan repayment schedule. It shows you the following components:
If you plan on prepaying any part of your loan, the prepayment analysis will also show you how much you owe over your chosen tenure, with and without the prepayment. This way you get to see how you can benefit from making advance payments.
Formula for Home Loan EMI Calculation:
E: 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 instalments 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
Calculation of home loan EMI is a simple method using an excel spreadsheet. 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 cash flow 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)
There are many advantages of using the EMI calculation tool provided by BankBazaar. They are listed below:
Easy process: You only have to enter the loan amount, interest rate, processing fee (if available), and tenure. No complicated calculations or difficult mathematics. The actual computation will be taken care of by the calculator.
Get the breakup of the finance charges: This tool helps you understand the financial charges such as total interest payable, and processing fee value associated with your EMI. Since banks and financial institutes present them as a percentage of the loan amount, knowing the actual value can help understand the true cost of the loan.
Comparing loan offers: You can use the loan calculator to compare loan offers from various banks. The results will show you the total cost of each loan along with their respective EMIs. This will help you narrow down on the most feasible option.
Choosing the right tenure: Knowing your EMI also helps you choose the right tenure of the loan. If you can afford to pay a higher EMI, you can choose a shorter loan period and pay off your loan at the earliest. Otherwise, you can pay a more comfortable EMI and extend your loan period.
Helps in validating information: If you are negotiating a housing loan deal with a bank, you can verify the repayment schedule it provides. The amortisation table details from the calculator can help you verify this. Do keep in mind that the numbers may sometimes differ. This is because lenders may also include certain other fees and charges in your EMI calculation.
Helps with loan management: Sometimes, while paying your EMIs, you may have some extra funds to make prepayments. If you want to revisit the financials and see how prepayments can help to pay off the loan before the term ends, the home loan EMI calculator can help you do that.
When calculating your EMI, the calculator includes all the parameters that impact it. Let’s take a look at the various factors that impact your monthly repayments:
Principal: The principal is the loan amount you initially borrow from the lender. It is directly proportional to your EMI. Higher the loan amount, higher the EMI.
Interest Rate: The interest rate is what you pay for borrowing the loan. In short, it shows you the cost of your loan. It differs from one bank to another. The higher the interest rate, the higher the EMI will be. Finding a lender that offers you the lowest interest rates can help you lower your EMIs. The lower the interest rate, the lower the total cost of your loan will be.
Tenure: The time you take to repay the amount you borrow is called tenure or the period of the loan. The tenure is inversely proportional to your EMI. The longer the loan tenure, the lower your EMI. The loan tenure is determined based on your age at the time of borrowing and your retirement age. The longest loan tenure offered banks in India is 30 years.
Processing Fee: This value is a percentage of your loan amount or a minimum or maximum fee decided by the lender. It is the fee that the bank charges to process your loan application. You can know about this amount from your loan documents. At least a part of this fee will be payable at the time of application. And your lender may not refund this amount even if your application is rejected.
Prepayments: As mentioned earlier, making prepayments on your property loan can help you reduce the outstanding principal. This, in turn, reduces your interest charges. And both together contribute to reducing your EMIs if you prefer to keep the tenure constant.
Your housing loan EMI is usually a fixed amount. But there are certain circumstances under which it can change. Let’s take a look at some of these instances:
Flexible EMIs: If you have opted for flexible EMIs such as in the case of step-up or step-down property loans, then there will be a change in your loan EMIs. In the case of step-up loans, your EMI will gradually increase over the tenure. In the case of step-down loans, your EMIs will decrease as time passes.
Partly Disbursed Loan: In the case of partly disbursed loans, the pre-EMIs will increase with each disbursement.
Loan Prepayment: Prepayments impact your EMIs as well. You can either choose to reduce the EMI for the same loan tenure or reduce the loan tenure and keep the EMIs constant. The latter is more beneficial since you will pay lesser interest.
Rise in the floating interest rate: Whenever the repo rate changes, the floating rate of interest also changes. If the floating rate increases, the lender will normally increase the loan tenure while keeping your EMI the same. If the new tenure exceeds the maximum period permitted, then the bank may increase your EMI.
Usually, people follow their EMI payment schedule. But if you have extra money, you can use it to pay off parts of your loan before they are due. This is known as prepayment.
When you prepay a portion of your loan, the amount goes towards reducing the outstanding principal. This benefits you because as your outstanding principal reduces, your interest charges will also reduce. Also, you will be able to repay the loan a lot faster.
In some cases, the lender will disburse the loan amount in stages. When this happens, you have to start paying your EMI only when you get the final amount and the whole loan has been disbursed. Till this date, you have to pay only the interest applicable on the partly disbursed amounts. This is known as pre-EMI.
Once the loan gets fully disbursed, the pre-EMIs will stop and you have to start paying your regular EMIs.
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.
Taking a loan to buy a house can be expensive, but it also has certain benefits, especially when it comes to taxes. The government offers tax reliefs via the Income Tax Act, 1961 on the EMIs you pay every year. These are as follows:
Section 80C: You can claim a tax deduction of up to Rs.1.5 lakh every year on the principal amounts paid towards your property loan.
Section 24: Under this section, you can claim a deduction of up to Rs.2 lakh on the interest component you pay each year.
Section 80EE: Under this section, you can claim an additional interest amount of up to Rs.50,000 per year. This is over and above the amounts mentioned in Sections 80C and 24. This deduction is subject to certain terms and conditions.
No, you don’t have to sign up or pay any fee to use the EMI calculator. It is completely free of charge and can be accessed by all.
Yes, this calculator is available on the BankBazaar mobile app. Open the menu on the left top corner of the app. Scroll down till you see “Finance Tools”. You will find the EMI calculator in this section.
An EMI calculator gives results based on the inputs you give it. That being said, the results may sometimes vary with what your lender gives you. This is because the lender may also factor in other costs and charges.
When you take a loan, it needs to be repaid in a certain manner. How you repay the loan is called amortisation. BankBazaar’s EMI calculator gives you the amortisation schedule of your loan as soon as you calculate your EMI.
The repayments on your loan are calculated on the basis of the principle of reducing balance. The interest rate is applied based on the amount of principal outstanding. Initially, the principal is high. So, the interest amount is also high. As your principal amount reduces, the interest charges also reduce proportionately.
Yes, there are a number of ways in which you can ease the pressure your home loan puts on you.
The interest loans offered by banks in India change from time to time. Visit our home loan page to know more about the best rates available right now.
Yes, you can. But this depends on the nature of your relationship with the joint applicant. Banks usually don’t offer such loans if you’re applying along with a friend or a non-blood relative.
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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