Home Loan EMI & Prepayment Savings Calculator
Standard bank calculators only show your monthly EMI. This tool reveals how paying just a little extra each month saves lakhs in interest and finishes your loan years early.
Paying just ₹3,000 to ₹5,000 extra directly towards principal reduces the compounding interest drastically.
Your loan ends 4.4 years earlier (15.6 years instead of 20 years)!
Key Mortgage Insights
• Tenure matters most: A 30-year loan has slightly lower EMI than a 20-year loan, but you pay more than double the total interest!
• Prepay early: Prepayments in the first 5 to 7 years have 5x more impact than prepayments in the final years.
Home Loan EMI & Prepayment — Frequently Asked Questions
How is a home loan EMI calculated?
EMI = [P × R × (1+R)^N] ÷ [(1+R)^N − 1], where P is the principal, R is the monthly interest rate (annual rate ÷ 12 ÷ 100) and N is the number of monthly instalments. Early EMIs are mostly interest; the principal share rises as the loan matures.
How much interest does prepaying an extra ₹5,000 a month save?
On a typical ₹50 Lakh, 20-year loan at 8.5%, an extra ₹5,000 every month saves well over ₹10 Lakh in interest and closes the loan roughly four to five years early. Prepayments applied in the first few years save the most, because that is when the outstanding principal — and therefore the interest accruing on it — is highest.
Should I reduce the EMI or the tenure when I prepay?
Reducing the tenure saves far more interest, because you keep paying the same amount against a shrinking principal. Reducing the EMI improves monthly cash flow but leaves the loan running for its original term, so most of the interest saving is lost.
Is there a penalty for prepaying a home loan in India?
No. The RBI bars banks and housing finance companies from charging foreclosure or prepayment penalties on floating-rate home loans taken by individual borrowers. Fixed-rate loans can still carry a charge, so check your sanction letter before making a lump-sum payment.
What EMI can I afford on my salary?
Lenders generally cap total EMIs at 50–55% of net monthly income (the FOIR limit), but 35–40% is a more comfortable ceiling once EPF, insurance and living costs are accounted for. Calculate your in-hand salary first, then work backwards to a loan amount.
Assumptions and formulas last reviewed on . See our calculation methodology.