Should a prepayment reduce my EMI or my tenure?

Reducing tenure saves far more interest because you stop paying interest sooner. Reducing the EMI only helps if your monthly cash flow is tight. Toggle the prepayment strategy above to compare both.

What is the real tax benefit on a home loan?

Under the old regime you can claim up to ₹1.5 lakh of principal under 80C and ₹2 lakh of interest under 24(b) for a self-occupied home. At the 30% slab that is up to ₹1.05 lakh of tax saved a year — but only while your interest component is still large.

Is a fixed or floating rate better?

Floating rates are usually 1-2% cheaper and carry no prepayment penalty, which is why most borrowers pick them. Fixed rates only make sense if you expect rates to rise sharply and you value certainty over cost.

What happens when interest rates rise?

Most lenders keep your EMI unchanged and extend the tenure instead. Check your amortisation statement after every rate revision — a 1% rise on a 20-year loan can add several years if the EMI is not increased.

Can I claim tax benefits under the new regime?

The Section 24(b) deduction for a self-occupied property and the 80C principal deduction are not available under the new regime. Compare both regimes before you file if you have a large home loan.

Home Loan EMI Calculator

Long-tenure, secured borrowing at the lowest rates, with tax relief on top.

Monthly EMI: ₹43,391
Total interest: ₹54,13,879
Principal + interest: ₹1,04,13,879
Total cost: ₹1,04,43,379

Your loan

Loan amount₹50 L

₹

Interest rate8.5%

% p.a.

Tenure20 yr

months

Where your money goes

Over 20 yr, ending Sept 2046.

Total cost of this loan

₹1,04,43,379

Principal₹50,00,000 48%
Interest₹54,13,879 52%
Fees & charges₹29,500 0%

Your path to debt-free

Interest dominates the early years; principal takes over later.

Principal Interest Balance (peak ₹49.76 L)

Pay it off early

One-time prepayment (₹)

Paid in month

Recurring prepayment (₹)

Repeats every (months)

Recurring payments start in month

A prepayment should Shorten the loanKeeps the EMI and clears the debt sooner. Saves the most interest.Lower the EMIKeeps the end date and frees up monthly cash flow instead.

The difference an extra payment makes

No extra payments in this plan.

Fees and charges

Processing fee (%)

Fee cap (₹, 0 = none)

Insurance (₹)

Other charges (₹)

Processing fee: ₹25,000
GST on fee: ₹4,500
Insurance: ₹0
Other charges: ₹0
Payable upfront: ₹29,500

Tax relief in 2027

Deductions available on this loan in its first full financial year.

Your tax slab

Principal repaid (Section 80C): ₹1,01,641
Interest paid (Section 24b): ₹2,00,000
Estimated tax saved: ₹90,492

Deductions apply under the old tax regime for a self-occupied property. The ₹1.5 lakh 80C limit is shared with EPF, PPF, ELSS and life insurance premiums.

Amortisation schedule

Principal	Interest	Total paid	Balance
₹24,093	₹1,06,080	₹1,30,173	₹49,75,907
₹1,01,641	₹4,19,053	₹5,20,694	₹48,74,266
₹1,10,625	₹4,10,069	₹5,20,694	₹47,63,640
₹1,20,403	₹4,00,290	₹5,20,694	₹46,43,237
₹1,31,046	₹3,89,648	₹5,20,694	₹45,12,191
₹1,42,629	₹3,78,065	₹5,20,694	₹43,69,562
₹1,55,236	₹3,65,457	₹5,20,694	₹42,14,325
₹1,68,958	₹3,51,736	₹5,20,694	₹40,45,367
₹1,83,892	₹3,36,802	₹5,20,694	₹38,61,475
₹2,00,147	₹3,20,547	₹5,20,694	₹36,61,328
₹2,17,838	₹3,02,856	₹5,20,694	₹34,43,490
₹2,37,093	₹2,83,601	₹5,20,694	₹32,06,397
₹2,58,050	₹2,62,644	₹5,20,694	₹29,48,348
₹2,80,859	₹2,39,835	₹5,20,694	₹26,67,489
₹3,05,684	₹2,15,010	₹5,20,694	₹23,61,805
₹3,32,704	₹1,87,990	₹5,20,694	₹20,29,101
₹3,62,112	₹1,58,582	₹5,20,694	₹16,66,989
₹3,94,119	₹1,26,575	₹5,20,694	₹12,72,870
₹4,28,956	₹91,738	₹5,20,694	₹8,43,914
₹4,66,872	₹53,822	₹5,20,694	₹3,77,042
₹3,77,042	₹13,479	₹3,90,521	₹0

Before you sign for a home loan

Where it works for you

The cheapest large loan available to an individual, typically 8-9.5%.
Tenures up to 30 years keep the EMI affordable on a big amount.
Section 80C allows up to ₹1.5 lakh a year on principal repaid.
Section 24(b) allows up to ₹2 lakh a year on interest for a self-occupied home.
Floating-rate home loans carry no prepayment penalty under RBI rules.

What it costs you

Over 20 years at 8.5% you repay roughly twice what you borrowed.
The property is mortgaged, so the lender can repossess it on default.
You must fund 10-25% of the property value yourself as a down payment.
Registration, stamp duty and legal fees add 6-8% on top of the price.
Floating rates can rise, silently extending your tenure rather than your EMI.

Who qualifies

Age 21-70 at loan maturity, with the tenure capped by your retirement age.
Stable income for 2-3 years; co-applicant income can be clubbed in.
Credit score of 750+ for the best rate slab.
Loan-to-value capped at 90% under ₹30 lakh, 80% up to ₹75 lakh and 75% above that.
Total EMIs under 50-60% of net monthly income.

What you need to submit

PAN, Aadhaar and passport-size photographs.
Income proof: 3 months of salary slips and Form 16, or 3 years of ITRs.
6-12 months of bank statements.
Sale agreement, title deed chain and approved building plan.
NOC from the builder or housing society.

Ways to pay less

One extra EMI a year on a 20-year loan can cut roughly 4 years off the tenure.
Prepay in the first 8-10 years — after that most of your EMI is already principal.
When prepaying, choose to reduce tenure rather than EMI to save the most interest.
Compare the total cost, not the headline rate: fees, insurance and legal charges add up.
Consider a balance transfer if another lender is 50+ basis points cheaper and you have 10+ years left.

Questions people ask

Lenders usually cap total EMIs at 50-60% of net monthly income. On a ₹1 lakh take-home with no other loans, that is an EMI of about ₹50,000, which supports roughly ₹60 lakh over 20 years at 8.5%.