EMI on a ₹30 lakh loan at 9.5% for 25 years

A home loan of ₹30 lakh at 9.5% a year for 25 years has an EMI of ₹26,211. Over the whole loan you pay ₹78,63,270, of which ₹48,63,270 is interest. That is 162 paise of interest for every rupee you borrow.

In the first year you pay ₹3,14,531 in EMIs. ₹2,83,680 of that is interest and only ₹30,851 repays the loan, so 90% of your first year’s EMIs goes to interest. After year 1 you still have ₹29,69,149 left to repay.

The EMI stays the same, but its mix changes every month. Principal first becomes larger than interest in year 19 of 25.

If you took the same loan for 20 years instead, the EMI would rise to ₹27,964 but the interest would fall to ₹37,11,345, which is ₹11,51,925 less.

A rate half a point lower, 9%, would make the EMI ₹25,176, which is ₹1,035 less each month. A rate half a point higher, 10%, would make it ₹27,261.

If you pay ₹2,600 extra every month on top of the EMI, the loan is cleared 6 years 7 months sooner and you save ₹15,08,765 in interest.

Change these numbers in the EMI calculator

Illustration only, not investment, tax or legal advice.