Getting a home loan can help turning your dream of owning house into reality. But can you afford a home loan in reality? Are you sure that you will be able to repay the housing loan without defaulting over the long tenure? Do you know the EMIs you will have to pay against your home loan on a monthly basis? If not, an online EMI calculator will help you by exactly doing that. BankBazaar’s Home Loan EMI Calculator will not only give you the monthly instalments you will have to make against your housing loan but also provide you the details of how your home loan is amortized over the loan tenure.
Home loan EMIs can be calculated using the formula:
P: Principal amount
n: Number of monthly instalments
r: Interest rate associated with your home loan
As of 23 Apr 2019, the rates of interest associated with IDBI home loans ranges between 8.80% p.a. and 9.15% p.a. While the interest rate applicable to salaried borrowers falls between the range 8.80% p.a. and 9.05% p.a., self-employed borrowers can avail IDBI home loans with interest rates starting from 8.85% p.a. to 9.15% p.a.
The interest rates mentioned are as of 23 Apr 2019 and can be changed by the bank at its own discretion.
IDBI Bank charges you a nominal fee for the processing of the home loan. As of March 2019, you will be charged a processing fee of 0.50% of the principal amount subject to a minimum of Rs.2,500 plus applicable taxes. The processing fee is to be paid while applying for the home loan.
Prospective borrowers can avail IDBI home loans starting from Rs.5 lakh and up to Rs.10 crores. IDBI bank also extended loan tenures up to 30 years to its customers.
Let us consider an example where you are availing a home loan of Rs.30 lakh from IDBI Bank for a term of 30 years. Let us assume that the interest rate associated with your home loan is 9.00% p.a. and the processing fee levied is 0.50% of the principal amount, i.e., Rs.15,000. Click on ‘Calculate’ once you have entered all the required input on the BankBazaar Home Loan EMI Calculator.
As per the values you have entered, the EMI calculated on your home loan would be Rs. 24,139
The break of the total amount payable on your home loan will be as follows:
|Total interest due||Rs.56,89,924|
|Total Amount Payable||Rs.87,04,924|
The amortization schedule illustrating the repayment of your home loan over the loan tenure from March 2019 to February 2049 will be
|Year||Principal Amount Paid (A)||Interest Amount Paid (B)||Total Amount Paid (A + B)||Outstanding Loan Balance|
There are mainly three aspects you should consider before choosing the tenure on your home loan:
Age: Your age plays an important role in choosing the tenure of your home loan. Home loan lenders also decide your loan depending on your current age in some cases. If you are in your 40s or 50s or if you’re nearing your retirement, opting for a short-term housing loan would be a wiser decision as you will only have a limited time in your hand to repay the home loan. Though some banks do extend the tenure up to the age of 65, you can always include your son/daughter as a co-applicant. Remember, you will be able to add your child as a co-applicant only if he/she is the co-owner of the property. Adding your child as a co-applicant will give you the benefit of extending the tenure of your home loan as the bank will now consider the age of your child after your retirement.
In case, you are in your 20s or 30s, you could opt for a home loan with a longer tenure. This will give you ample time to repay your home loan without impacting your personal finances. You can also choose to increase your EMIs with your improving salary over the years.
Income: You can also choose between a short-term and long-term loan by taking your monthly income into consideration. Choosing a short-term home loan when you are having a low income would not only make it difficult to manage your expenses but could also result in defaulting your home loan repayments. Hence, it is advised to go for a short-term home loan only if you have adequate/high monthly income. Making higher Equated Monthly Instalments (EMIs) will also help you clear your home loan sooner. However, it is advised to go through your budget and revise your financials before choosing a long-term loan in order ensure that the monthly instalments do not burn your pocket.
On the other hand, you can consider opting a home loan with a long tenure if you have a comparatively lower income. Since loans with longer loan tenures attract lower EMIs, the impact on your finances could be controlled with proper budgeting. You can also choose to increase your EMIs when your monthly income increases in the near future, allowing you to bring down the tenure or the interest rate applicable on your home loan.
Interest Rate: The interest rate applicable on your home loan is the cost of credit you will be paying for the loan during the tenure. The rate of interest is directly proportional to the tenure of your loan. The longer your tenure is, the higher the interest rate will be. This will also result in higher EMIs during the tenure, increasing the total cost of credit on your home loan. You can always utilise the home loan EMI calculator to get a better idea of how your home loan EMI payments will be. All you have to do is key in the necessary input on the EMI calculator. You will be provided with the EMI that will have to be made against your loan along with the break-up of the total amount payable during the tenure. You can also go through the amortization schedule to learn more about your EMI payments, I.e., how much of your monthly instalments are being attributed towards the principal and interest components of your home loan.
1. How does a Home Loan EMI Calculator function?
Home Loan EMI calculator is a simple tool that calculates the monthly instalments payable against a home loan by taking various values such as the interest rate, tenure of the loan and the principal amount into account.
2. What is Amortization Schedule?
The Amortization Schedule is the table which illustrates the repayment schedule made against your home loan on a monthly/annual basis. The table also illustrates how your Equated Monthly Instalments (EMIs) are being lined up towards the interest and principal component of your home loan.
3. Is making partial pre-payments beneficial?
Yes, making partial pre-payments can prove to be beneficial. Making prepayments will not only help you bring down the outstanding principal amount but also lower the home loan tenure or the EMIs payable against your loan.
4. What are the home loan EMI tax benefits?
5. What is the difference between Pre-EMI and EMI?
Pre-EMI is the interest paid on the loan amount disbursed until the complete disbursal of your home loan. The pre-EMI is to be made on a monthly basis until the final disbursal is made. Only after the last disbursement is made will the regular EMIs commence.
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