Home Loan EMI Calculator

As per RBI guidelines, banks can fund up to 90% of property value for loans up to ₹30 lakhs, up to 80% for loans between ₹30L–₹75L, and up to 75% for loans above ₹75 lakhs. So for a ₹1 Cr property, the maximum loan is ₹75 lakhs (75% LTV), and you must arrange at least ₹25 lakhs as down payment. A lower LTV means lower risk for the bank, which sometimes results in better interest rates.

Both reduce total interest, but in different ways. A shorter tenure means higher EMI from day one but saves the most interest overall. Prepayments are flexible — you make lump-sum payments when you have surplus cash (bonus, inheritance, etc.) without committing to higher monthly outflows. Most financial advisors suggest taking a longer tenure to keep EMI comfortable, then aggressively prepaying whenever possible. Early prepayments save more because they reduce the principal on which future interest compounds.

In India, most home loans are floating rate (linked to repo rate via EBLR). Fixed rate loans are typically 1.5–2% higher than prevailing floating rates. Historically, floating rates have been cheaper over 10–20 year periods because they benefit from rate cuts. However, in a rising rate environment, your EMI or tenure increases. Fixed rates offer certainty. Current RBI trend (2024–25) shows rate stability or potential cuts, making floating rates attractive. Most borrowers choose floating rates for long-tenure home loans.

Under the old tax regime: Section 24(b) allows deduction of up to ₹2 lakhs per year on interest paid for self-occupied property. Section 80C allows deduction of up to ₹1.5 lakhs per year on principal repayment (within the overall 80C limit). For under-construction property, pre-EMI interest can be claimed in 5 equal instalments post-possession. The new tax regime (default from FY 2024-25) does not allow these deductions, so you must opt for the old regime to claim home loan tax benefits.

For floating rate loans linked to EBLR (External Benchmark Lending Rate), changes in the RBI repo rate are transmitted within 3 months. A 0.25% rate cut reduces your effective rate by the same amount. Banks typically give you two choices: keep EMI the same and reduce tenure, or keep tenure the same and reduce EMI. Most banks default to adjusting tenure. If you want the EMI reduced, you need to specifically request it. Our calculator models rate sensitivity — try changing the rate by 0.25% to see the EMI impact.