Arthgyaan

Supporting everyone's personal finance journey

How much EMI do I have to pay for my home loan?

This article shows a handy ready reckoner for home loan EMI amounts for all tenures and interest rates along with the amount of principal and interest to be paid.

How much EMI do I have to pay for my home loan?


Posted on 29 Sep 2023
Author: Sayan Sircar
9 mins read
📢Join 3400+ readers on WhatsApp and get new post notifications!

This article shows a handy ready reckoner for home loan EMI amounts for all tenures and interest rates along with the amount of principal and interest to be paid.

How much EMI do I have to pay for my home loan?

This article is a part of our detailed article series on the concept of home loans. Ensure you have read the other parts here:

📚 Topics covered:

How does a home loan work?

Mortgage payment vs home equity

The bank gives a home loan to own the property while you use it until you pay back the loan via EMIs. An Equated Monthly Instalment plan (EMI) is a standard way to pay off a loan by making a fixed payment monthly that includes both interest and principal in the same amount.

EMI = Principal + Interest

In each EMI, the split of the interest and principal changes since the interest is based on the outstanding loan balance at that point and the rest of the EMI is principal. As the chart shows, the interest part drops off with time, and the rest is the principal. The actual numbers in the chart relate to a ₹50 lakhs home loan taken at 8% for 25 years. The EMI is ₹38,591. The down payment amount is ₹12.5 lakhs.

You can test the numbers using this calculator:

As you pay back the loan, your ownership share in the house will increase in the same way. At the point of taking the loan, you own 20% of the house (12.5 out of 62.5, of which 50 is the loan). The bank owns 80%. As the loan is repaid, you own more and more of the house as the principal is paid off. This is the concept of building equity in an asset. Equity is the part of the asset you own after subtracting the part that the bank owns.

Home equity value = Current home value - Outstanding loan balance

Once you build equity in your home, that has additional benefits:

  • You can take a top-up loan in case you need money for some other purpose like home improvement or any other reason.
  • The more you will get to keep if you sell the house.

We break down the home loan rate into its major components to see where the fluctuations come from.

Repo linked home loan rate = Repo Rate + Spread + Premium

Repo rate: This rate is decided by the RBI. Home loan rates will move up and down as soon as the RBI revises the repo rate.

The latest repo rate is 6.5%. This rate was last reviewed by the RBI on 08 Feb 2024.

Spread: This is an additional rate on top of the repo rate that essentially captures the profit the bank can make off this loan relative to the deposits it offers to customers. This rate is generally revised every three years but will vary from bank to bank.

Premium: An extra value for some specific customers. For example, SBI adds another 15 bps for non-salaried customers or it will depend on the CIBIL score of the borrower. This value is also revised periodically, like every three years.

Related:
This article explains how overall repo rate changes affect both borrowers and depositors.

EMI per ₹1 lakh of outstanding balance

In the sections below, we will show the EMI for a ₹1 lakh outstanding loan balance. You can simply multiply the numbers in the tables with your actual loan balance to find your EMI number.

EMI per ₹1 lakh of outstanding balance for below market rate loans

(click to open in a new tab)
EMI Per Lakh Of Outstanding Balance For Below Market Rate Loans

EMI per ₹1 lakh of outstanding balance for above market rate loans

(click to open in a new tab)
EMI Per Lakh Of Outstanding Balance For Above Market Rate Loans

Did you know that we have a private Facebook group which you can join for free and ask your own questions? Please click the button below to join.

Also read
How to Track Your NPS Portfolio for Free with the Arthgyaan Goal-Based Investing Tool?

Total interest paid per ₹1 lakh of outstanding balance

Total interest paid per ₹1 lakh of outstanding balance for below market rate loans

(click to open in a new tab)
Total Interest Paid Per Lakh Of Outstanding Balance For Below Market Rate Home Loans

Total interest paid per ₹1 lakh of outstanding balance for above market rate loans

(click to open in a new tab)
Total Interest Paid Per Lakh Of Outstanding Balance For Above Market Rate Home Loans

What about EMI per lakh figures for other loans?

We have a detailed list of EMI per lakh figures for car, credit card, gold and personal loans here: EMI Calculator: know your emi per lakh to easily know how much total EMI you have to pay

Related Articles

What's next? You can join the Arthgyaan WhatsApp community

You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.

For resident Indians 🇮🇳:


For NRIs 🇺🇸🇬🇧🇪🇺🇦🇺🇦🇪🇸🇬:


Share on WhatsApp:

To understand how this article can help you:

If you have a comment or question about this article

The following button will open a form with the link of this page populated for context:

If you liked this article, please leave us a rating

The following button will take you to Trustpilot:

Discover an article from the archives

Previous and next articles:



Latest articles:



Topics you will like:



Next steps:

1. Email me with any questions.

2. Use our goal-based investing template to prepare a financial plan for yourself.

Don't forget to share this article on WhatsApp or Twitter or post this to Facebook.

Discuss this post with us via Facebook or get regular bite-sized updates on Twitter.

More posts...

Disclaimer: Content on this site is for educational purpose only and is not financial advice. Nothing on this site should be construed as an offer or recommendation to buy/sell any financial product or service. Please consult a registered investment advisor before making any investments.

This post titled How much EMI do I have to pay for my home loan? first appeared on 29 Sep 2023 at https://arthgyaan.com


We are currently at 491 posts and growing fast. Search this site:
Copyright © 2021-2024 Arthgyaan.com. All rights reserved.