Planning a home loan? The first number every buyer checks is the monthly EMI (Equated Monthly Installment). Knowing how EMI is calculated helps you compare banks, choose tenure wisely and avoid over-borrowing.
What is home loan EMI?
EMI is a fixed monthly payment that includes both principal and interest. In the early years, a larger share goes to interest; later, more goes to principal repayment.
Home loan EMI formula
The standard formula used by banks:
EMI = P × r × (1 + r)n / ((1 + r)n − 1)
- P = Loan principal (amount borrowed)
- r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = Total number of monthly instalments (years × 12)
Example: ₹50 lakh at 8.5% for 20 years
- Principal: ₹50,00,000
- Annual rate: 8.5% → monthly r ≈ 0.007083
- Tenure: 20 years = 240 months
- Approximate EMI: ₹43,400 (use calculator for exact figure)
Total payment over 20 years will be higher than ₹50 lakh because of interest. That is why comparing EMI alone is not enough — always check total interest payable.
Tips before you apply
- Keep EMI below 40–50% of monthly income for comfort.
- Shorter tenure = higher EMI but lower total interest.
- Check prepayment options — even small extra payments save lakhs.
- Compare processing fee, insurance and other charges.
Use Master Calc Loan EMI Calculator
Instead of manual math, open our free Loan EMI Calculator on Master Calc. Enter loan amount, interest rate and tenure to see EMI, total interest and full amortization-style breakdown instantly — on mobile or desktop, no signup.
Disclaimer: Results are estimates for planning only. Actual bank EMI may differ slightly due to rounding and charges.