Home Loan EMI Formula
The standard formula used by all banks to calculate your monthly home loan EMI is:
EMI Formula
EMI = P × r × (1+r)n / ((1+r)n − 1)
Where:
P = Principal loan amount
r = Monthly interest rate (Annual rate ÷ 12 ÷ 100)
n = Loan tenure in months
Example Calculation
For a home loan of ₹30,00,000 at 8.5% annual interest for 20 years:
- Monthly rate = 8.5 ÷ 12 ÷ 100 = 0.007083
- n = 20 × 12 = 240 months
- EMI = 30,00,000 × 0.007083 × (1.007083)240 / ((1.007083)240 − 1)
- EMI ≈ ₹26,035
- Total payment ≈ ₹62,48,400
- Total interest ≈ ₹32,48,400
How to Use This Home Loan Calculator
- Enter your desired loan amount.
- Enter the interest rate offered by your bank.
- Enter the tenure in years.
- See your monthly EMI, total interest, and total payment instantly.
Frequently Asked Questions
How is home loan EMI calculated?
EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is principal, r is monthly interest rate, and n is number of months.
What is the current home loan interest rate in India?
Home loan rates in India typically range from 8.5% to 10.5% per year depending on the bank and your credit score.
Does a longer tenure reduce EMI?
Yes. A longer tenure reduces monthly EMI but increases the total interest paid over the loan period.
Can I prepay my home loan?
Yes. Most banks allow prepayment after 12 months. Prepaying reduces total interest significantly.