EMI calculator
An EMI is the fixed monthly instalment that repays a home loan with interest. A ₹50 lakh loan at 8.5% a year over 20 years costs ₹43,391 a month, and ₹54.14 lakh in interest over the loan.
- Monthly EMI
- ₹43,391
- Total interest
- ₹54,13,840
- Total you repay
- ₹1,04,13,840
Repayment by year
How it is worked out
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the loan, r the monthly rate (the yearly rate ÷ 12 ÷ 100) and n the number of months. Interest is charged on the balance still owed, so early instalments are mostly interest and later ones mostly principal.
Worked example: P = ₹50,00,000, r = 8.5 ÷ 12 ÷ 100 = 0.00708, n = 240 months. EMI = ₹43,391; you repay ₹1,04,13,840 in all.
Questions
- How is a home loan EMI worked out?
- With the reducing-balance formula EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the loan, r the monthly interest rate and n the months. Interest is charged only on the balance you still owe.
- What is the EMI on a ₹50 lakh home loan?
- At 8.5% a year for 20 years, ₹43,391 a month. A longer tenure lowers the EMI but raises the total interest.
- Does a longer tenure save money?
- No. It lowers each EMI but you pay interest for longer, so the total cost rises. Paying a little more each month, or prepaying when you can, cuts the interest.