Calculate your home loan EMI and repayment details
Buying a home is probably the biggest financial decision most people make in their lives. And for most of us, that means taking a home loan. A home loan (also called a housing loan or mortgage) lets you borrow money from a bank to buy or construct a house, with the property itself serving as the security (collateral). You repay the loan in monthly EMIs over a period that can extend up to 30 years.
Before applying for a home loan, it is important to understand not just the EMI amount, but the total cost of the loan โ how much interest you will end up paying over the entire tenure. Our calculator shows you all of this instantly.
Banks typically sanction home loans based on two criteria:
LTV ratio (Loan to Value): Loans up to โน30 lakh โ up to 90% of property value. Loans โน30โ75 lakh โ up to 80%. Loans above โน75 lakh โ up to 75%. So for a โน60 lakh flat, you can get maximum โน48 lakh loan. The remaining โน12 lakh is your down payment.
EMI to Income ratio: Banks prefer that total EMIs (home loan + any other loans) dont exceed 50โ55% of your monthly gross income. If you earn โน80,000 per month, total EMIs should be under โน40,000โ44,000. Some banks calculate on net income.
Fixed Rate: Interest rate remains same throughout the tenure. Predictable EMI. Currently around 9.5โ11% for most lenders. Good when you expect rates to rise in the future. Downside โ you dont benefit if rates fall later. Usually slightly higher than floating to start with.
Floating Rate: Interest rate is linked to an external benchmark โ usually RBI repo rate (EBLR linked loans). When RBI cuts rates, your interest rate falls. When RBI raises rates, it increases. Currently most home loans are floating at 8.5โ9.5%. In a falling rate environment, floating is clearly better.
RBI mandates that all new floating rate home loans be linked to an external benchmark since October 2019. This means rate changes must be passed on within 3 months โ so consumers benefit faster from rate cuts.
Principal repayment โ Section 80C: Up to โน1.5 lakh per year. This competes with PF, PPF, insurance premium etc. in the same โน1.5L limit. Note: If you sell the house within 5 years of purchase, the deductions claimed are reversed and added back to income.
Interest payment โ Section 24(b): Up to โน2 lakh per year for self-occupied property. No upper limit for let-out property (though overall loss from house property that can be set off is capped at โน2 lakh). Under new tax regime, this deduction is not available.
First time buyer โ Section 80EEA: Additional โน1.5 lakh deduction on interest for first time home buyers (loan sanctioned between specific dates, property value up to โน45 lakh). Check current applicability as this changes by budget.
This is one of the most debated personal finance questions. Mathematically, if your home loan rate is 9% and you can earn 12โ13% in equity mutual funds, investing is better than prepaying. But the peace of mind from being debt-free has value that numbers dont capture.
A practical approach many follow: build 6 months emergency fund first, max out PPF and 80C, then use surplus for prepayment or investment based on comfort level. At minimum, try to make one extra EMI per year โ it reduces tenure significantly without much strain.