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Step by Step Process - How to Calculate Home Loan EMI

When you take a home loan, you pay back the principal and interest through EMIs or Equated Monthly Instalments, which are divided equally across the tenor. Knowing how to calculate EMI is important as this amount determines the affordability of the loan. The answer to this common question of how to calculate housing loan EMI is two-fold as you can compute your monthly instalment offline by yourself or online with a home loan EMI calculator.

Read on to learn more about how to calculate EMI (interest and principal outgo each month).

Basic Formula to Calculate EMI for Housing Loan

The first step to learning how to calculate EMI of your home loan is to understand the EMI formula. It is:

EMI = [P x R x (1+R)N ]/[(1+R)N-1]


P is the principal or loan amount

R is the monthly home loan interest rate

N is the number of EMIs or the tenor in months

From this, you can see that your home loan EMI depends on 3 factors: The principal, the interest rate, and tenor.

What is a Home Loan EMI Calculator?

A home loan EMI calculator is an online tool you can use to see your EMI amount in an instant. All you need to do is enter values for the principal, interest rate, and tenor for the calculator to give a result using the EMI formula. It does so without error and so, if you’re wondering how to calculate EMI of home loan without a mistake, use the tool!

How to Calculate Monthly Home Loan EMI Online?

To use the home loan EMI calculator online all you need to do is provide values for the:

  • Loan amount (principal)
  • Tenor
  • Rate of interest

You can enter these amounts in the blank fields or use the sliders. The output is your home loan EMI, the total interest payable, and the total payment.

Below is a table illustrating these.

Loan amount Tenor Interest rate Loan EMI Total interest payable Total payment (Principal + Interest)
Rs. 2,00,00,000 20 years 10% Rs.1,93,004 Rs.2,63,21,233 Rs.4,63,21,233
Rs. 3,00,00,000 20 years 11% Rs.2,89,506 Rs.3,94,81,835 Rs.6,94,81,835


How to Calculate Home Loan EMI Manually?

Now that you know how to calculate EMI of home loan online, you may want to learn how to calculate EMI for home loan manually, using pen and paper. This process involves adding values to the EMI formula described above.

Consider a home loan of Rs.2,00,00,000 taken for 20 years, at an interest rate of 10%.


P = 2,00,00,000

R = (10/12)% = 0.833%

N = 12 x 20 = 240


EMI = [P x R x (1+R)N ]/[(1+R)N-1]


(1+R)= (1+.008331250) 240  = 7.322


EMI = (2,00,00,000 x 0.00833 x 7.322)/(7.322-1)

        = 1,92,952

As you can see, the value closely matches the one generated by the EMI calculator. When you round up the decimal places, some variation occurs.

When learning how to calculate house loan EMI, you may find that the home loan EMI calculator is not only easier to use, but also provides error-free and accurate results. Additionally, you can use a home loan eligibility calculator to know your eligibility beforehand.

Benefits of Learning How to Calculate EMI on Home Loan

  • When you learn how to calculate monthly EMI for your home loan, you will know your debt outgo or total dues for the month and for the year. This will help you plan for repayment better.
  • Knowing how to calculate housing loan EMI also helps you pick the right tenor.
  • You also learn how to calculate the home loan amount that you can afford to borrow based on the EMI amount as per your budget.