Recalculate your Home Loan EMI and Total Interest Due in a snap!
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|
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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.
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:
EMI is divided across each month over the loan repayment period.
The EMI of your home loan can be calculated using 4 major factors such as:
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.
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.
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:
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.
Listed below are the various factors affecting 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))
This formula doesn’t include the home loan processing fee charged by the bank.
Listed below are the various benefits if using a home loan EMI calculator:
Home loan EMI is fixed but there are certain circumstances under which it can change such as:
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:
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.
The following are the components of a home loan amortisation table:
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Home loans, in essence, are advances taken from financial institutions to fund the purchase of a residential property. In India, banks are the most popular financiers of homes. With growing demand for real estate in India, basic home loan products have been tweaked resulting in variants that suit diverse individual needs.
Home loan products offered in India
They are categorised according to the purpose they are availed for. Home loans are commonly offered:
Other variants of home loans are:
Home loan interest rates are offered either on a fixed or floating rate basis or a hybrid of fixed and floating rates.
Floating rate home loans are those where the interest rate is pegged to the bank’s lending rate. The interest rate can change over the tenure of the loan. Most home loans in India are disbursed on the basis of floating interest rates.
Fixed rate home loans are those where the interest rate remains fixed over the tenor of the loan. These are not popular and are opted for when rates are expected to rise in the foreseeable future. Fixed rate home loans often come with a reset clause i.e. the rate can be revised upwards or downwards or converted to floating rates after a specific number of years.
Hybrid rate home loans are those where the loan is structured such that fixed rates and floating rates apply during different times during the loan period.
Home loan rates of some of the leading banks in India have been tabulated below. Interest rate trends can be gauged by changes made by these banks.
|Bank Name||Home Loan Interest Rate|
|State Bank of India (SBI)|| All: 10.15%
Maxgain: Rs.1 crore and > - 10.40%
Women: 0.05% less than existing rates
|ICICI Bank (SBI)||Salaried:
Floating: 10.15% - 10.25%
Fixed, 1 or 2 yrs.: < Rs.75 lakhs - 10.15%
Rs.75 lakhs - Rs.5 crores - 10.50%
Fixed, 10 yrs: < Rs.1.5 crores - 10.25%
Rs.1.5 crores to Rs.5 crores - 10.40%
Rs.5 crores and > - 10.50%
Floating: < Rs. 75 lakhs - 10.15%
Rs.75 lakhs and > - 10.35% - 11.00%
Fixed, 1 or 2 yrs.: < Rs.75 lakhs - 10.25%
Rs.75 lakhs to Rs.3 crores - 10.50%
Rs.3 crores to Rs.5 crores - 11%
Fixed, 10 yrs: Below Rs.1.5 crores - 10.25%
Rs.1.5 crores to Rs.5 crores - 10.40%
Rs.5 crores and > - 10.50%
Below Rs.75 lakhs: Floating - 10.10%; Fixed - 10.20%
|Punjab National Bank (PNB)||Floating: < Rs.75 lakhs - 10.25%
Rs.75 lakhs and > - 10.50%
Fixed: < Rs.75 lakhs - 10.75%
Rs.75 lakhs and > - 11%
Flexible - OD: < Rs.75 lakhs - 10.25%
Rs75 lakhs and > - 10.50%
(+0.50% on existing rates for 3rd house onwards)
|Bank of Baroda (BOB)||Floating, 5 to 30 yrs.: 10.25%|
< Rs.75 lakhs - 10.20%
Rs.75 lakhs and > - 10.45%
|Bank of India (BOI)||Star Home: < Rs.75 lakhs - 10.20%
Rs.75 lakhs and > - 10.45%
Star Diamond: Rs.5 crores and > - 10.45%
Star Smart: < Rs.1 crore - at Star Home rates
Rs.1 crore and > - 0.25% over Star Home
< Rs.75 lakhs - 10.15% to 10.65%
Rs.75 lakhs and > - 1025% to 10.75%
Floating: < Rs.30 lakhs - 10.50% to 11%
Rs.30 lakhs and > - 10.75% to 11.75%
Floating: 10.15% to 10.65% (limited offer)
TruFixed Plus, fixed 2 yrs. (limited offer):
< Rs.30 lakhs - 10.25% to 10.75%
Rs.30 lakhs to Rs.75 lakhs - 10.50% to 11%
Rs.75 lakhs and > - 10.50% to 11%
TruFixed Plus, fixed 3 yrs. (limited offer):
< Rs.30 lakhs - 10.75% to 11.25%
Rs.30 lakhs to Rs.75 lakhs - 10.75% to 11.25%
Rs.75 lakhs and > - 11% to 11.50%
|Standard Chartered Bank (SCB)||Up to Rs.10 crores: 10.15% upwards|
|IDBI Bank||Home Loan (floating): 10.25%
Home Loan (fixed): < Rs.30 lakhs - 10.75%
Rs.30 lakhs and > - 11%
Home Loan Interest Saver (floating): 10.40%
|Axis Bank||Salaried: < Rs.75 lakhs - 10.15%
Rs.75 lakhs and > - 10.40%
Self-employed: < Rs.25 lakhs - 10.40%
Rs.25 lakhs and > - 10.90%
Home loans are repayable in fixed installments over the loan period. These installments are called EMIs (Equated Monthly Installments).
Borrowers have to repay the principal as well as the interest on the loan. Every month, a part of the principal and interest due is repaid until the entire loan is cleared in full.
Although the EMI (i.e. monthly principal and interest payments) remains the same every month, the ratio of principal to interest payments changes. Initially, interest payments are high but as time progresses, interest payments reduce and EMIs comprise mostly principal payments.
This is because most banks use the monthly reducing balance method whereby interest is calculated on the balance outstanding at the end of every month i.e. interest is not charged on amounts already repaid.
P = Principal; i = interest rate (monthly i.e. annual rate divided by 12); n = loan period (in months i.e. loan period divided by 12)
Using the above formula and considering a loan of Rs. 10 lakhs @ 10% p.a. for a period of 5 years, the EMI = Rs.21,247.
This is payable over a period of 60 months i.e. 5 years / 12.
The amortization table below shows the loan repayment schedule.
It depicts how the EMI = Rs.21,247 is split between interest and principal payments. The balance outstanding reduces every month thereby reducing interest due.
|Month||Opening Balance||Principal Repaid||Interest Paid||Outstanding Balance|
These are online tools that borrowers can use to calculate their home loan EMIs by inputting data pertaining to the loan amount, tenure and interest rate.
It is useful for quick calculations to assess monthly outflows, make comparisons between home loan schemes, before applying to a bank, and on existing loans, in case of refinancing.
Banks are bound to assess borrowers, applying for a home loan, based on their creditworthiness.
Determining whether a borrower is eligible for a home loan depends on a number of factors, all of which go to showing whether the borrower can repay the loan, completely and in a timely manner, over the entire loan period.
Maintain or improve credit scores by utilising debt responsibly and making timely repayments, in full. Banks commonly prefer a CIBIL score ranging between 750 and 900 points. Checking scores before applying for a loan provides opportunities to improve a bad score. (This includes credit card usage).
Display a good repayment record on past loans/credit cards to increase financial credibility when applying for a fresh home loan.
Reduce financial obligations by clearing outstanding debt. Banks are more confident disbursing loans to borrowers who don’t have other loans to service.
Include a co-applicant e.g. a spouse to enhance income levels. Loan amounts are usually sanctioned up to 50% of the borrower’s income.
Include all components of primary income when declaring earnings e.g. bonus, perks etc. in addition to basic salary and other/alternative sources of income e.g. rental income. This gives a broader view of income levels, positively influencing a bank’s outlook on earning capacity.
Build / leverage on existing relationships with the bank as a customer. Banks are more likely to approve loans of customers who have dealt satisfactorily with them in the past since they feel they already know the borrower. It is also one way for the bank to retain customers and build goodwill.
Show sufficient funds to make a down-payment. The LTV ratio offered by most banks ranges between 70% to 80%. The balance, usually the down-
payment, has to be borne by the borrower. Alternatively, investing in a less expensive property will reduce the loan requirement. Banks tighten their approval processes for large loan amounts.
Opt for a long-term loan. Longer tenures bring down EMIs since the amount to be repaid is spread over many months/years. Lower EMIs mean less strain on income which in turn strengthens repayment capabilities.
Highlight positive personal attributes e.g. good educational qualifications, few dependents, good health, strong history of savings/money management, residential stability etc. A stable borrower is unlikely to default on repayments. Also, a borrower with fewer dependents has fewer personal financial obligations.
Opt for loans that offer repayment flexibility e.g. staggered repayment schedules wherein interest charged is lower during the initial part of the loan period and higher during the latter. Banks may accommodate borrowers on this basis based on proven potential for higher incomes in the foreseeable future.
Invest in quality properties. Banks tend to qualify borrowers who plan to invest the funds obtained through a home loan in high-quality properties. This is because the property so funded is usually mortgaged to the bank as security.
Offer additional collateral by pledging physical assets such as existing property, investment instruments like shares or term insurance to get a positive risk rating. Alternatively, appoint a guarantor.
Apply while still young. Most banks require home loans to be repaid before the borrower retires. Applying for a home loan late in life limits the loan period. This increases EMIs since the option to stretch payments over a longer tenure is not available.
Want to buy your dream home? You can use a home loan from a reliable bank to finance your big investment. When you are selecting a home loan, you will need to put in a little effort to find a dependable loan provider and low interest rates.
Your monthly expenditures will be very high when you have to pay home loan EMIs. You will need to plan all your expenses efficiently depending on your monthly income. If you already have a loan, you need to work on reducing your current interest rates.
You also need to bear in mind that home loan repayments typically go on for almost 10 years. Home loan tenures are very long. We advise you to plan your monthly expenses at the beginning of each month.
Shift from fixed interest rate to adjustable interest rate: Are you currently following a fixed interest rate for your home loan? For the remaining term of your loan, you can move from fixed interest rate to an adjustable interest rate. You may be required to pay a certain fee for converting the rate.
Shift to MCLR: The Reserve Bank of India (RBI) asked banks to shift to Marginal Cost of Funds-based Lending Rate (MCLR) in 2016. The MCLR is better than the Benchmark Prime Lending Rate (BPLR) or the Base Rate systems as it is more transparent. It shows updates regarding policy rates very clearly. With the MCLR system, banks are required to assess your MCLR rate on a monthly basis and modify your interest rate regularly and not once a year. The bank is also expected to inform you when your interest rate was altered. The MCLR system will enable you to receive the advantages of the repo-reduction system. Therefore, with this system, you can enjoy the benefits of interest rate cuts that are going to be made in the near future.
Transfer your home loan balance: Banks allow you to move your remaining home loan balance to a different loan provider. The remaining loan amount will be paid by your new loan provider. The new bank will give you a new loan with different terms and conditions and a new interest rate. You need to ensure that the new interest rate is lower. This option is ideal if your current loan provider is not ready to alter your current terms or to reduce your interest rate.
Modify your current interest rate to a lower one: You can move to a lower interest rate in the dual rate loan option or in the adjustable rate option. This is good for people who have taken home loans from a housing finance company or a Non-Banking Financial Company (NBFC). You can lower your interest rate to the updated interest rates that are prevailing in the market. You will need to pay a minimal fee for converting your interest rate.
Raise your EMI: To lower your home loan interest rate you can increase your monthly payment amounts and complete the full payment. You may have to present your latest bank statements or salary slips to alter your EMI amount.
Prepay your home loan: You can prepay your home loan fully or a segment of your loan. It is a great idea when the home loan rates are low. Most banks will ask you to pay prepayment charges. You will need to ensure that these prepayment fees are lesser than the savings you make on interest.
You can follow these guidelines to lower your home loan EMI rate. When you reduce your rate, you can save a lot of money.
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
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
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
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
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
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
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
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
Loan rates for ordinary citizens will drop which includes car and housing loans with the RBI declaring 25 basis points 6.25% repo rate cut. This means the lending companies have to revise their rates based on the new repo rates as the repo rate is directly linked to Marginal cost of funds based lending rates (MCLR) therefore making the changes clear instantly. The lending rates of the bank are also affected by the repo rate as well as the Monthly reporting for MCLR.
19th October 2016
With RBI cutting the repo rates by 25 basis points, real estate developers are ecstatic about a potential increase in demand in the real estate market. With the first round of repo cuts coming in April followed by the most recent rate cut, experts are positive that the banks will transfer the benefit to the customers. With the slash in rates, people will be keen to buy property and banks can offer home loans at cheaper EMI’s. Using the new rates offered, prospective home loan applicants can use the revised rates and calculate their EMI’s using an EMI calculator. Rajeev Talwar, the CEO of DLF Ltd feels that the time of the rate cuts couldn’t have been better and the revised rates can offer attractive home loan interest rates during the upcoming festival season.
4th October 2016