Home Loan Calculator
Estimate your monthly mortgage payments, analyze substantial interest savings from part-prepayments, and compute tax deductions under Sections 24(b) and 80C. Built for Indian homebuyers to evaluate loan eligibility, compare fixed vs floating rates, and minimize total borrowing cost.
🏠 Property & Loan Parameters
Client-Side Privacy⚙️ Advanced: Processing Fee & GST
⚡ Part-Prepayment Simulator
Simulate paying extra each month or a one-time lump-sum to save lakhs in interest.
📊 Repayment & Savings Summary
₹2,00,000 / yr
₹1,50,000 / yr
📅 Yearly Amortization Schedule
Principal and interest repayment schedule with year-end loan balances.
| Year | Opening Balance | Principal Paid | Interest Paid | Total Paid | Closing Balance |
|---|
Fixed vs Floating Interest Rate: Which Should You Choose?
When financing a residential property in India, your choice between fixed and floating interest rates significantly impacts your long-term borrowing expenses:
- Floating Interest Rates (RLLR / MCLR): Most Indian retail home loans are pegged to the RBI Repo Rate (External Benchmark Lending Rate or Repo-Linked Lending Rate - RLLR). Whenever the Reserve Bank alters repo rates, your loan interest resets almost immediately. As an RBI benefit, individual floating-rate home loans carry zero prepayment penalties, allowing you to pay down principal anytime without fees.
- Fixed Interest Rates: A fixed rate locks your interest percentage for a set period (or the entire tenure). While offering absolute repayment certainty, fixed rates typically carry a premium of 1% to 2.5% higher than prevailing floating rates. Crucially, commercial lenders often impose foreclosure charges on fixed-rate loans if refinanced or prepaid.
How Prepayment Saves Massive Interest: Real Worked Example
Because home loans follow a reducing balance compounding schedule, the initial 5 to 7 years are heavily front-loaded with interest. Prepaying even modest sums directly lowers your outstanding principal, terminating decades of compounding interest before it accumulates.
Worked Comparison: ₹48,00,000 Loan @ 8.5% over 20 Years
Standard Repayment: Paying the regular monthly EMI of ₹41,656 over 240 months results in a total interest outgo of ₹51,97,322—more than the original property loan itself!
With Prepayment Strategy: Adding an extra ₹5,000 to your monthly payment plus a single lump-sum prepayment of ₹2,00,000 at Year 3 slashes total interest to ₹34,73,675. You save over ₹17.2 Lakhs in pure cash and become completely mortgage-free 5.5 years early.
Common Mistakes Indian Homebuyers Make
- Focusing Only on Monthly EMI Instead of Total Outgo: Extending tenure from 20 to 30 years lowers monthly EMI by a small percentage but balloons total interest payable by over 60%.
- Ignoring Ancillary Closing Fees: Property acquisition involves stamp duty, registration charges (5%–7%), GST on under-construction flats, processing fees (0.25%–0.50%), legal verification, and property valuation charges.
- Maxing Out the FOIR Threshold: Borrowing up to the 50%–60% bank limit leaves zero financial buffer for career disruptions, emergency medical expenses, or home maintenance costs.
- Overlooking Tax Regime Shifts: Relying on Section 24(b) and 80C tax deductions without evaluating whether the New Tax Regime (Section 115BAC) offers lower baseline tax rates without home loan paperwork.
Frequently Asked Questions
How does part-prepayment reduce home loan interest?
What are the home loan tax deductions under the Old Tax Regime?
What is FOIR and how does it determine my home loan eligibility?
Should I choose 'Reduce Tenure' or 'Reduce EMI' when prepaying?
Are there prepayment penalty charges on home loans in India?
What is the difference between MCLR and Repo-Linked Lending Rate (RLLR)?
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Disclaimer: Estimates for information only, not financial advice. Verify interest rates, prepayment terms, and tax eligibility with your lending bank and certified chartered accountant.