Considering the annual interest rate is between 7.2-13%, the EMI for a ₹50 Lakh home loan for 15 years would range from ₹45,502 to ₹63,262.
A home loan is a long-term commitment; therefore, it is vital to know the EMI amount for your loan well in advance. In this article, we will explore the factors that affect a home loan EMI and the formula used to calculate it. If you are not keen on doing the math yourself, you can use the Moneyview Home Loan EMI Calculator, which will give you your answer within seconds.
Without further ado, let’s see how you can calculate home loan EMI in advance.
Loan Amount
Min ₹100,000
Max ₹100,000,000
Rate of Interest
Min 6%
Max 15%
Loan Tenure
3
months
Min 3 months
Max 72 months
EMI stands for Equated Monthly Installment. It is the fixed amount you pay every month on a fixed date to pay back a loan.
For borrowers, the benefit of calculating EMI is that they know exactly how much money they will need to pay each month, which makes budgeting easier. For lenders, the benefit of EMIs is that they give a steady and predictable income from interest.
The EMI for a home loan is calculated by adding the principal amount and the total interest and dividing the result by the number of periods multiplied by the number of months.
Here is the formula used for calculating EMI:
EMI = P x r x (1+r)n
———————
[(1+r)n-1]
Where:
P = Principal amount
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Number of monthly payments
Now, let’s use a real-world example to understand the formula.
Let’s imagine Raghav takes a home loan of ₹50 Lakh at an annual interest rate of 10% and the tenure is 15 years.
In this case,
P = ₹50,00,000
r = 10 ÷ 12 ÷ 100 = 0.00833
n = 15 x 12 = 180
EMI = [50,00,000 x 0.00833 x (1+0.00833)^180] / [(1+0.00833)^180-1] = ₹53,718.02
Raghav would have to pay an EMI of ₹53,718.02 for the duration of the loan.
An amortization table breaks down each payment of your home loan and shows how much of it goes toward the principal and how much goes toward interest.
Here is the amortization table for the loan Raghav has taken:
|
Year |
Interest |
Principal |
Ending Balance |
|---|---|---|---|
|
1 |
₹4,93,177.22 |
₹1,51,585.85 |
₹48,48,414.15 |
|
2 |
₹4,77,304.20 |
₹1,67,458.87 |
₹46,80,955.28 |
|
3 |
₹4,59,769.07 |
₹1,84,994.00 |
₹44,95,961.27 |
|
4 |
₹4,40,397.78 |
₹2,04,365.29 |
₹42,91,595.98 |
|
5 |
₹4,18,998.06 |
₹2,25,765.01 |
₹40,65,830.97 |
|
6 |
₹3,95,357.51 |
₹2,49,405.56 |
₹38,16,425.41 |
|
7 |
₹3,69,241.49 |
₹2,75,521.58 |
₹35,40,903.84 |
|
8 |
₹3,40,390.78 |
₹3,04,372.29 |
₹32,36,531.55 |
|
9 |
₹3,08,519.03 |
₹3,36,244.04 |
₹29,00,287.51 |
|
10 |
₹2,73,309.88 |
₹3,71,453.19 |
₹25,28,834.32 |
|
11 |
₹2,34,413.88 |
₹4,10,349.19 |
₹21,18,485.13 |
|
12 |
₹1,91,444.96 |
₹4,53,318.11 |
₹16,65,167.02 |
|
13 |
₹1,43,976.63 |
₹5,00,786.44 |
₹11,64,380.58 |
|
14 |
₹91,537.74 |
₹5,53,225.33 |
₹6,11,155.25 |
|
15 |
₹33,607.82 |
₹6,11,155.25 |
₹0.00 |
While you can use the above formula to predict your home loan repayment, there are some factors that can affect your repayment schedule.
The longer the tenure of the loan, the smaller the EMI amount will be. If there are any changes in the tenure, it will change the payable EMI amount as well. However, remember that by choosing a longer tenure, you will have to pay an increased rate of interest.
You can choose to pay a lump sum toward the principal amount to close the home loan early. This is called a partial prepayment, and it can affect your home loan EMI, as it changes the balance amount. This in turn reduces the payable interest on the outstanding sum.
Fixed rate of interest remains the same throughout the duration of the loan. However, if you opted for a floating interest rate, it can fluctuate depending on the market rates. If there is an increase or decrease in the interest rate during the tenure, it will affect your home loan EMI.
You can transfer your home loan to a different lender using the home loan transfer facility. Through this, you may be able to get better interest rates on your loan. However, be sure to calculate the loan transfer cost against the savings on interest you make by switching lenders.
Your Dream Home is Now a Click Away
With Moneyview, you can get home loans with interest rates starting from 7.25% per annum. You can also choose to repay the loan in up to 30 years! With our quick approval and processing time and 100% online application process, here is how you can start building your dream home:
1
STEP 1
Enter personal details and submit the application
2
STEP 2
Lending partner calls you to confirm details
3
STEP 3
Site visit and in-person discussion
4
STEP 4
Loan approval and funds disbursed
The EMI for a ₹50 Lakh home loan depends on the interest rate and the tenure of the loan. With the current market rate of interest on a home loan, you can expect an EMI of anywhere from ₹45,502 to ₹63,262 if the tenure is 15 years. The longer the tenure, the lower the EMI.
You can use the Moneyview Home Loan EMI Calculator to estimate the EMI in advance.
Apply for a home loan through Moneyview and enjoy low interest rates starting from 7.25%. Download the app now!
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Disclaimer
The starting interest rate depends on factors such as credit history, financial obligations, specific lender's criteria and Terms and conditions. Moneyview is a digital lending platform; all loans are evaluated and disbursed by our lending partners, who are registered as Non-Banking Financial Companies or Banks with the Reserve Bank of India.
This article is for informational purposes only and does not constitute financial or legal advice. Always consult with your financial advisor for specific guidance.
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