What is a Home Loan EMI Calculator?
A Home Loan EMI Calculator helps you estimate the monthly Equated Monthly Installment (EMI) for your housing loan. It factors in the loan amount, interest rate, and tenure to calculate your fixed monthly payment.
This calculator also shows year-wise amortization, prepayment impact analysis, and tax benefits available under various sections of the Income Tax Act.
Home Loan Interest Rates in India (January 2026)
| Bank | Interest Rate | Processing Fee |
|---|---|---|
| SBI | 8.25% - 9.55% | 0.35% (min ₹2,000) |
| ICICI Bank | 7.65% - 8.85% | 0.50% - 1% |
| HDFC Bank | 7.90% - 9.40% | 0.50% (max ₹3,000) |
| Bank of Baroda | 8.15% - 10.65% | 0.25% - 0.50% |
| LIC Housing | 8.50% - 10.50% | 0.50% |
Rates as of January 2026. Subject to credit score and bank policies.
Home Loan EMI Formula
Where:
P = Principal (Loan Amount)
r = Monthly interest rate (Annual Rate / 12 / 100)
n = Total number of monthly installments (Years × 12)
Example: ₹40 lakh at 8.5% for 20 years
r = 8.5 / 12 / 100 = 0.00708
n = 20 × 12 = 240 months
EMI = [40,00,000 × 0.00708 × (1.00708)^240] / [(1.00708)^240 - 1]
EMI = ₹34,713 per month
Home Loan Tax Benefits (Old Regime)
- Section 80C: Principal repayment deduction up to ₹1.5 lakh per year
- Section 24(b): Interest deduction up to ₹2 lakh for self-occupied property (no limit for let-out)
- Section 80EEA: Additional ₹1.5 lakh interest deduction for first-time buyers (stamp duty value up to ₹45 lakh)
- Section 80EE: Additional ₹50,000 interest deduction (loan sanctioned between 1 Apr 2016 - 31 Mar 2017)
RBI Prepayment Rules (January 2026)
• No Prepayment Charges: Banks cannot charge any fee for prepaying floating-rate home loans
• No Foreclosure Charges: Full loan closure is free for floating-rate loans
• No Lock-in Period: Prepay from day one without restrictions
• Any Source: Use savings, bonus, or even another loan for prepayment
• Balance Transfer: Move to another bank without exit fees
Fixed-rate home loans may still have charges (up to 2-3%).
Prepayment Strategy: Tenure vs EMI
For a ₹40 lakh loan at 8.5% for 20 years with ₹5 lakh prepayment after 2 years:
- Reduce Tenure: New tenure 16 years 4 months | Interest saved: ₹10.86 lakh
- Reduce EMI: New EMI ₹30,530 | Interest saved: ₹6.12 lakh
Verdict: Reducing tenure saves 77% more interest!
Frequently Asked Questions (FAQs)
How much home loan can I get based on my salary?
Banks typically approve loans where EMI is 40-50% of your net monthly income. For ₹1 lakh salary, you can expect EMI up to ₹50,000, translating to approximately ₹55-60 lakh loan at current rates for 20 years.
What is the minimum down payment for a home loan?
Banks typically finance 75-90% of property value (LTV ratio). You need to pay 10-25% as down payment from your own funds. For affordable housing under PMAY, LTV can go up to 90%.
Is it better to prepay home loan or invest?
If loan rate is 8.5% and you're in 30% tax bracket, effective cost is ~6% after tax benefit. Equity investments historically return 12-15%. For long-term (10+ years), investing may be better. For peace of mind and guaranteed returns, prepayment is safer.
Can I take a home loan for under-construction property?
Yes, banks offer home loans for under-construction properties. Loan is disbursed in tranches as construction progresses. You pay Pre-EMI (only interest) during construction, which transitions to full EMI upon possession.
What happens if I miss a home loan EMI?
Missing EMI results in: Late payment fee (1-2%), negative impact on credit score, loan becoming NPA after 90 days. Banks send reminders before taking legal action. Always inform your bank if facing difficulties.
Can I transfer my home loan to another bank?
Yes, balance transfer is common when you get a lower interest rate elsewhere. With RBI's 2026 guidelines, there are no foreclosure charges on floating-rate loans. New bank charges processing fee but overall savings can be substantial.