How monthly EMI is worked out
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan, r is the monthly interest rate (the yearly rate ÷ 12 ÷ 100) and n is the number of months. Early EMIs are mostly interest, and more of each one goes to the loan as the balance falls. Our post on how home loan EMI is calculated explains it step by step.
Choosing a tenure
A longer tenure lowers the EMI but raises the total interest a lot. On ₹50 lakh at 8%:
| Tenure | Monthly EMI | Total interest |
|---|---|---|
| 10 years | ₹60,664 | ₹22,79,656 |
| 20 years | ₹41,822 | ₹50,37,281 |
| 30 years | ₹36,688 | ₹82,07,762 |
The rate decides this as much as the tenure. See home loan interest rates in India and fixed or floating rates.
How much EMI fits your income
Banks look at all your EMIs together as a share of your income, called FOIR, and many stay around 40% to 50%, though each sets its own limit. A bank's limit isn't the same as what feels comfortable, so check the EMI against your take-home pay and your other household costs.
The eligibility calculator works out how much a bank may lend on your income.
This is an estimate from the numbers you enter, using the reducing balance method. Your bank's sanction letter has the real figures, including fees and how the rate can change.