Home Loan EMI: Tenure, Prepayment and How Much You Can Borrow

To work out a home loan EMI, enter the loan amount, yearly interest rate and tenure in the EMI Calculator. It uses the standard reducing-balance formula and shows the EMI, total interest and a year-by-year schedule. A ₹25 lakh loan at 8.5% for 20 years costs ₹21,696 a month and ₹27,06,939 in interest. Add an extra monthly payment to see how much prepaying saves, and use the Home Loan Eligibility calculator to see how much you can borrow on your income.

All figures here are estimates. Your lender's offer, fees and rules decide the real numbers.

How is EMI calculated?

The calculator uses the reducing-balance formula:

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)

Here P is the loan amount, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the number of months. For ₹25,00,000 at 8.5% over 240 months, r is about 0.0070833 and the EMI comes to ₹21,695.58, shown as ₹21,696.

Each month, interest is charged on the balance still owed and the rest of the EMI repays principal. That is why early EMIs are mostly interest. In month one, ₹17,708.33 of the ₹21,696 is interest and just ₹3,987.25 reduces the loan. Across the whole first year you pay ₹2,10,591 of interest and only ₹49,756 of principal.

Does a longer tenure cost more?

Yes, by a lot. A longer tenure lowers the EMI but stretches the period over which interest builds up. For the same ₹25 lakh at 8.5%:

• 15 years: EMI ₹24,618; total interest ₹19,31,328; total paid ₹44,31,328
• 20 years: EMI ₹21,696; total interest ₹27,06,939; total paid ₹52,06,939
• 25 years: EMI ₹20,131; total interest ₹35,39,203; total paid ₹60,39,203
• 30 years: EMI ₹19,223; total interest ₹44,20,221; total paid ₹69,20,221

Going from 20 to 30 years cuts the EMI by about ₹2,473 a month but adds ₹17,13,282 of interest. The rate matters too: at 9% instead of 8.5% over 20 years, the EMI rises to ₹22,493 and interest to ₹28,98,356.

How much does prepaying a home loan save?

The EMI Calculator's Extra payment every month (optional) box adds a fixed prepayment on top of each EMI. The EMI stays the same and the loan simply finishes sooner. On the ₹25 lakh, 8.5%, 20-year loan:

• ₹5,000 extra a month: the loan closes in 12 years 11 months, total interest drops to ₹16,17,579, and the calculator reports a saving of about ₹10,89,361.
• ₹10,000 extra a month: it closes in 9 years 8 months and saves about ₹15,33,560.

Prepayment works best early, when most of each EMI is interest. The tool models a steady monthly prepayment only. It doesn't model a one-off lump sum or a lender recalculating a lower EMI, so check your loan agreement for prepayment terms.

How much home loan can I get on my salary?

The Home Loan Eligibility calculator applies two limits and takes the lower one:

1. Income (FOIR). Your maximum EMI is net monthly income (plus any co-applicant's) × the share allowed for EMIs, minus EMIs you already pay. The calculator turns that EMI into a loan amount at your rate and tenure.
2. Loan-to-value (LTV). Following RBI limits, a bank can lend at most 90% of the property value for loans up to ₹30 lakh, 80% up to ₹75 lakh and 75% above that. Your down payment sets the property price, so it caps the loan too.

Example (the calculator's defaults): ₹1,00,000 net monthly income, FOIR 50%, 8.5%, 20 years, ₹10 lakh down payment. The maximum EMI is ₹50,000, which supports a loan of ₹57.62 lakh. But ₹10 lakh down is only 20% of a ₹50 lakh home, so LTV limits the loan to ₹40 lakh, with an EMI of ₹34,713. A notice explains that a bigger down payment would raise the limit.

Raise the down payment to ₹20 lakh and income becomes the limit: a loan of ₹57,61,542 at the full ₹50,000 EMI, for a ₹77.62 lakh property. Stretching to 25 years lifts it to ₹62.09 lakh. An existing ₹15,000 EMI would cut the income-based limit to ₹40.33 lakh.

How do I use the calculators step by step?

1. Open the EMI Calculator and enter Loan amount, Interest rate (per year) and Tenure, choosing Years or Months.
2. Read Monthly EMI, Total interest, Total payment and Loan closes in.
3. Optionally type an amount in Extra payment every month. A note shows the interest saved.
4. Switch between Yearly schedule and Monthly schedule, and click Download CSV to keep the amortisation table.
5. In the Home Loan Eligibility calculator, fill in Your net monthly income, Co-applicant's net monthly income, Existing EMIs per month, Share of income allowed for EMIs (FOIR) (the hint suggests lenders typically allow 40–60%), Interest rate, Tenure (1 to 30 years) and Down payment you can make.
6. Read Estimated loan you can get, the EMI against your maximum affordable EMI, and Property price you can afford.

For a car or personal loan with fortnightly or weekly repayments, or a currency other than rupees, the Loan Calculator also works out an amortisation schedule. Its default ₹5,00,000 at 9.5% over 5 years is ₹10,500.93 a month with ₹1,30,055.84 of interest. Its Extra payment box shows the number of payments saved.

Why is my bank's EMI different?

• Rounding and start dates. Lenders may round differently or charge interest from the disbursement date before EMIs begin. The calculator's note says the same.
• Fees and insurance. Processing fees, loan insurance and taxes are not part of the calculation.
• Rate changes. On a floating-rate loan the lender may change the EMI or the tenure when rates move. Rerun the calculator with the new rate to see the effect.
• Eligibility is only a guide. Banks also look at your credit score, age, employer and the property itself. The calculator's tenure hint notes that loans are usually set to end by age 60 to 65.
• Forgetting purchase costs. Stamp duty and registration are paid on top of the down payment; estimate them with the Stamp Duty Calculator.

Quick answers

What is the EMI on a ₹25 lakh home loan for 20 years?

At 8.5% a year, the EMI is about ₹21,696 a month, with total interest of ₹27,06,939 over 240 months. At 9% it is about ₹22,493.

Is a shorter loan tenure better?

It costs much less overall. On ₹25 lakh at 8.5%, a 15-year loan has an EMI of ₹24,618 and ₹19.31 lakh of interest, while a 30-year loan has an EMI of ₹19,223 but ₹44.20 lakh of interest.

How much home loan can I get with a ₹1 lakh monthly salary?

If lenders allow 50% of your income for EMIs and you have no other loans, ₹50,000 a month at 8.5% over 20 years supports about ₹57.6 lakh. RBI's LTV limit still requires a down payment of at least 20% of the property value for a loan of that size.

How much do I save by paying ₹5,000 extra every month?

On a ₹25 lakh loan at 8.5% for 20 years, ₹5,000 extra each month closes the loan in 12 years 11 months and saves about ₹10.89 lakh of interest, according to the EMI Calculator.