Home Loan Calculator
Loan Details
Total Cost of Loan
What is a Home Loan?
A Home Loan (or mortgage) is an amount of money borrowed from a bank or financial institution to purchase or construct a house. The property itself serves as collateral for the loan. Borrowers repay the loan amount along with interest in Equated Monthly Installments (EMIs) over a predetermined period (tenure), which can range from 5 to 30 years.
How to Use the Home Loan Calculator?
Our Home Loan Calculator helps you estimate your monthly EMI, the total interest payable, and the total cost of your house over the loan tenure. To get an accurate estimate, input the following details:
- Loan Amount: The principal amount you plan to borrow from the lender. Remember, banks usually finance only up to 80-90% of the property value.
- Interest Rate (%): The annual interest rate charged by the bank. Home loan rates typically range from 8% to 10% in India, depending on the RBI repo rate and your credit score.
- Loan Tenure: The duration of the loan. A longer tenure reduces your monthly EMI but increases the total interest paid.
Understanding Amortization
When you pay an EMI, it goes toward both the principal amount and the interest. Amortization is the process of spreading out these payments over the loan tenure. In the early years of a home loan, a large portion of your EMI goes toward paying off the interest. As the years progress, the interest component decreases, and a larger portion goes toward repaying the principal amount. Our calculator's amortization schedule helps you visualize this breakdown year by year.
Frequently Asked Questions (FAQs)
What is a good tenure for a home loan?
The ideal tenure depends on your monthly cash flow. While a 20-30 year tenure reduces the monthly EMI burden, it significantly increases the total interest paid. If you can afford it, a shorter tenure (10-15 years) is financially better.
Can I prepay my home loan?
Yes, most banks allow you to prepay your home loan without any penalty, provided you have a floating interest rate loan. Prepaying even a small amount every year can drastically reduce your total interest and tenure.
Are there tax benefits on home loans in India?
Yes, under the Indian Income Tax Act, you can claim deductions on both the principal repayment (under Section 80C, up to ₹1.5 Lakh) and the interest payment (under Section 24b, up to ₹2 Lakh) for a self-occupied property.