Add a yearly prepayment to see how much interest you save and how many years earlier you could become debt free. Paying even one extra EMI a year can shorten a 20 year loan significantly.
How home loan EMI and prepayment are calculated
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
- P
- Loan amount
- r
- Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n
- Tenure in months
- Prepayment
- Extra amount paid at the end of every loan year
Each month, interest is charged on the outstanding balance and the rest of the EMI reduces the principal. A prepayment goes straight to principal.
The calculator keeps your EMI unchanged and reduces the tenure, which is how most banks treat prepayments by default and which saves the most interest.
Home loan tax benefits
Under the old tax regime, home loan borrowers can claim two key deductions. Use our income tax calculator to see whether they make the old regime better for you.
- Up to ₹2 lakh a year on interest for a self-occupied property under Section 24(b).
- Up to ₹1.5 lakh on principal repayment within the Section 80C limit.
- Joint borrowers who are co-owners can each claim these limits.