Question 1

How is home loan EMI calculated?

Accepted Answer

Home loan EMI uses the reducing-balance formula: EMI = P x r x (1+r)^n / ((1+r)^n - 1). Interest is charged each month on the outstanding balance, which falls as you repay.

Question 2

What home loan interest rate is typical?

Accepted Answer

Home loan rates in India are usually 8% to 9.5%, linked to the RBI repo rate. Rates vary by lender, loan amount, your credit score and whether the rate is floating or fixed.

Question 3

Can I save interest by prepaying my home loan?

Accepted Answer

Yes. Prepaying reduces the outstanding principal, which lowers the interest charged in all future months. Even small, regular prepayments can cut years off the loan and save significant interest.

Question 4

Are there tax benefits on a home loan?

Accepted Answer

Under the old tax regime, you can claim up to Rs 2 lakh on home loan interest under Section 24(b) and up to Rs 1.5 lakh on principal under Section 80C for a self-occupied house. The new regime does not allow these for a self-occupied property.

Year	Principal Paid	Interest Paid	Balance
Yr 1	₹99,511	₹4.21 L	₹49.00 L
Yr 2	₹1.08 L	₹4.12 L	₹47.92 L
Yr 3	₹1.18 L	₹4.03 L	₹46.74 L
Yr 4	₹1.28 L	₹3.92 L	₹45.46 L
Yr 5	₹1.40 L	₹3.81 L	₹44.06 L
Yr 6	₹1.52 L	₹3.69 L	₹42.54 L
Yr 7	₹1.65 L	₹3.55 L	₹40.89 L
Yr 8	₹1.80 L	₹3.41 L	₹39.09 L
Yr 9	₹1.96 L	₹3.25 L	₹37.13 L
Yr 10	₹2.13 L	₹3.07 L	₹35.00 L

Home Loan EMI Calculator

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