Calculator
Home Loan Calculator with Prepayment
See the instalment, and what a prepayment would save.
Result
- Monthly EMI
- ₹44,986
- Total interest over the full term
- ₹57,96,711
- Interest after the prepayment
- ₹38,51,881
- Interest saved
- ₹19,44,831
- Tenure shortened by
- 54 months
Assumes a fixed rate on a monthly reducing balance, and that the instalment stays the same after a prepayment so the term shortens. Keeping the instalment and shortening the term saves more interest than reducing the instalment over the original term.
Results are estimates for general information and not professional advice.
How this calculator works
A home loan runs long enough that the interest usually exceeds the amount borrowed. On a 20-year loan, total interest can be close to the principal, which is why prepayment has such a large effect.
When you prepay, you can either keep the instalment and shorten the term, or keep the term and reduce the instalment. Keeping the instalment saves considerably more interest, because the balance falls faster. This calculator models that option.
A prepayment made early saves far more than the same amount paid later, because interest in the early years is charged on a much larger balance. The same ₹5 lakh is worth several times more in year two than in year fifteen.
Lenders may apply conditions to prepayment of a fixed-rate loan. Floating-rate home loans to individuals are generally free of a prepayment charge, but check the sanction terms.
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Frequently asked questions
Quick answers to the questions we hear most often.
Still have a question?
A chartered accountant will look at your case and reply within one business day.
Ask a CAShould I shorten the tenure or reduce the EMI?
Shortening the tenure saves more interest, because the outstanding balance reduces faster. Reducing the instalment helps monthly cash flow instead. The calculator shows the saving on the shorten-the-tenure basis.
Is prepaying better than investing the money?
It depends on the loan rate against the return you expect after tax, and on how much certainty you want. A prepayment gives a certain saving at the loan rate; an investment return is not certain.
Does this include the tax benefit on a home loan?
No. Deductions for interest and principal depend on the regime you choose and on conditions in the Act, so they are not modelled here. The comparison between regimes is a separate calculation.
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