Home loan EMI calculator

Prepayment leads this page

An EMI is the smaller story on a 20-year home loan. The larger story is how a prepayment moves it. A ₹40,00,000 loan at 9 per cent over 20 years carries ₹46,37,369 of interest if it runs full term (more than the loan itself). An extra ₹10,000 a month closes it in about 142 months (12 years, not 20) and cuts the interest paid to ₹25,02,625: a saving of ₹21,34,744. That is the single-largest number most homeowners can move with small monthly discipline.

The other choice re-amortises the EMI at each prepayment, which helps cash flow more than the interest total. A one-off lump sum under that option keeps the term at 20 years; a recurring top-up still closes the loan before 20 years because the top-up keeps being paid over the shrinking EMI. The page lets you toggle between the two.

The 2026 RBI rule on floating-rate prepayment charges

The Reserve Bank's Pre-payment Charges on Loans Directions, 2025 took effect for loans sanctioned or renewed on or after 1 January 2026. For a floating-rate loan to an individual borrower for a non-business purpose, the lender cannot charge any prepayment fee. The rule covers full as well as partial prepayment, any source of funds, and holds even where a dual-rate or special-rate loan is on the floating leg at the time of prepayment. It replaces ten earlier RBI circulars.

Two things to note: it applies to the sanction or renewal date, not the prepayment date, so a 2024 floating-rate loan is not covered unless it has been renewed. And loans to individuals for business purposes, or to MSEs, follow a lender-type-specific scope that is outside what this calculator models. If your loan is fixed-rate, the sanction letter will still spell out a prepayment charge; check it before you prepay.

Worked example a reader can check

A ₹50,00,000 property, a ₹10,00,000 down payment, so a ₹40,00,000 loan. At an assumed 9 per cent for 20 years, the monthly rate is 9 divided by 1200, or 0.0075. The number of months is 240. The EMI from the standard formula is ₹35,989. Across the full 240 months, you pay ₹86,37,369, of which ₹46,37,369 is interest.

Now add ₹10,000 a month on top, under a reduce-tenure choice. In the first month, the EMI plus the top-up chops ₹35,989 plus ₹10,000, less the first month's interest of ₹30,000, so ₹15,989 of principal leaves the balance in that month (against ₹5,989 without the top-up). The compounding reverses itself: a smaller balance earns less interest the next month, so more of each future EMI chips at principal. The schedule reaches zero in month 142.

Tax rules in short, old regime only

Deductions on a home loan sit in the old regime only. The new regime gives no relief on self-occupied home loan interest, and the deduction for principal is likewise unavailable there. If you file under the new regime, the tax lines below do not apply.

Under the old regime, for a self-occupied property:

• Interest paid: deductible up to ₹2,00,000 a year (the deduction earlier known as section 24(b)).
• Principal repaid: part of the ₹1,50,000 aggregate cap for the deduction earlier known as section 80C. The cap is shared with PPF, EPF, ELSS, life insurance premium and others, so the slot is often full before the principal uses it.

For a let-out property, interest has no cap at source, but the overall set-off against rental income is ₹2,00,000 a year under the old regime, with the balance carried forward for up to eight assessment years.

The Finance Act 2026 was reported to propose folding pre-construction interest inside the ₹2,00,000 self-occupied cap. This page does not treat it as settled; check it against the gazetted Act before relying on it.

Repo rate and how a floating rate resets

A floating-rate home loan today is tied to the RBI repo rate, which stands at 5.50 per cent after the 25 basis-points hike on 7 October 2026, plus the lender's spread. When the benchmark moves, the lender can reset either the EMI, the tenure, or both. The RBI expects the lender to offer the borrower a choice between the three at every reset.

This calculator holds the rate fixed for the full term; it is not a live-rate tool. To test a reset, run it twice: once at the current rate and once at the rate you want to model. The gap between the two interest totals is the exposure to one reset.

Reduce the tenure or reduce the EMI

When a prepayment comes in, a lender usually offers two paths. Keep the EMI steady and chop the tail off the schedule (reduce tenure), or keep the schedule and re-amortise the smaller outstanding over the remaining months (reduce EMI). The interest total is always smaller under the first because the balance sits on the books for fewer months.

The second path trims the monthly outgo rather than the interest total, which helps cash flow. It is cleanest with a one-off lump sum: the schedule re-amortises the smaller outstanding over the remaining months, the instalment drops, and the tenure stays at the original term. With a recurring top-up the picture is different. The schedule re-amortises every month to a smaller EMI, but the borrower keeps paying the same top-up over that shrinking instalment, so the loan still closes early. On the ₹40,00,000, 20-year, 9 per cent loan with ₹10,000 a month, the reduce-tenure path closes in 142 months and saves about ₹21 lakh; re-amortising the EMI with the same top-up closes it in 223 months instead of 240, saves about ₹13 lakh, and the EMI trims from ₹35,989 toward zero across the term. Either choice beats paying no extra, which is really the point.

What this page leaves out

• Processing fees, documentation charges, valuation fees and GST on each; a home loan's one-time costs sit outside the EMI arithmetic.
• Property insurance, home insurance premiums bundled into the loan, or any top-up loans against the same property.
• A rate reset partway through the term; model it with two separate runs.
• Pre-EMI interest during a construction period, which is a separate cash flow; treat it on its own and only then start the EMI schedule here.
• CERSAI charges and MODT stamp duty for the security creation; these are one-time fees paid at sanction.
• Tax computations themselves; this page states the caps, the income tax calculator tallies the final liability.

Frequently asked questions

Courses that teach the subject behind the home loan EMI calculator