How to calculate EMI for your Home Loan with an online calculator?

How do I calculate my Home Loan EMI?

Nowadays, the decision to take out a Home Loan to help purchase your dream home is quite common. However, it is still a significant financial decision that requires intelligent financial planning and years of commitment. When you take a Home Loan, you are expected to repay it in instalments, better known as EMI (Equated Monthly Instalment). Before you apply, you can calculate your EMI using a Home Loan EMI Calculator. The EMI calculator allows borrowers to check the affordability of their Home Loan plan. It also lets them to analyse different scenarios. They are available online and are relatively easy to use. 

Since Home Loans usually last over two decades, you must choose an affordable and sustainable EMI. To ensure you are comfortable paying the EMI amount, use the EMI calculator to its full extent. This article will show you how. Additionally, this article will discuss the difference between a Home Loan and a mortgage loan so you can decide which one is best for you.

Understanding Home Loan EMI Calculators 

A Home Loan Calculator estimates the EMI amount you will be required to pay. These calculations are made based on several factors. These factors are the loan amount, the loan tenure period, and the interest rate. Here’s how each factor contributes to the calculation of your Home Loan EMI. 

Principal Loan Amount: It represents the actual sum you wish to borrow. The loan amount plays a large role in determining your EMI. A larger loan amount leads to a higher EMI, while a lower loan amount leads to a smaller one. An important aspect to consider when it comes to loan amounts is the down payment you can make on the loan. A larger down payment reduces the principal amount owed and hence reduces EMI. Therefore, experts always advise borrowers to make a down payment as large as possible when taking out a Home Loan. 

Loan Interest Rate: The rate of interest a borrower is expected to pay every month can significantly drive up the costs of a Home Loan. Therefore, potential borrowers should find a lender offering attractive interest rates. The lower the interest rate, the lower your EMI will be. Another important aspect of interest rate is the type. There are two types of interest rates: floating interest rate and fixed interest rate. Floating interest rates are subject to fluctuation depending on market conditions. Fixed interest rates are set when the loan is approved, and they do not change during the tenure. With a Home Loan EMI calculator, you can enter different interest rates to determine which will be more cost-effective in the long run. 

Loan Tenure: It denotes the time the loan will last. There are a few important aspects for borrowers to consider. A longer tenure reduces EMIs but increases the amount of interest rate. A shorter tenure increases EMI and reduces the interest rate. Ideally, borrowers should aim to find a healthy balance between the two to maintain short-term and long-term stability. 

How to Use a Home Loan EMI Calculator? 

To use a Home Loan calculator, you must be clear on the loan amount, loan tenure and applicable interest rate. Once you input these figures into the calculator, it will instantly generate your EMI amount. You can then adjust the values you entered until you find a Home Loan plan that seems appropriate. Analyse different scenarios and even change and check the tenure to find the suitable one for your loan plan. You can easily adjust the values by shifting the slider to the left and right. The calculator is easy to use and calculates results instantly, so you can easily calculate your loan costs. 

All the calculations provided by the Home Loan EMI Calculator are accurate and give interested users a precise break-up of the financial charges. These charges can also include loan processing fees and other such charges so that users get a holistic picture of their total costs. Loan calculators also allow you to compare offers from different lenders, ensuring you get the best Home Loan deal available in the market. 

By assessing your financial stability and expenses, you can ensure your Home Loan EMI does not strain your monthly income too much. Thus, you can use a Home Loan EMI calculator to ensure your calculated EMI does not exceed your budget. 

Difference Between Home Loan & Mortgage Loan 

In both a Home Loan and a mortgage loan, the house you are taking the loan for is held as collateral by your lender. However, the total loan amount a borrower can receive from these two products differs. In a Home Loan, a borrower can get up to 90% of the property’s value as a loan. In a mortgage loan, borrowers can get up to 75% of the property’s present market value. Hence, depending on the value of the property being placed by collateral, the amount you can receive through a Home Loan can be significantly more than a mortgage loan


Now that you know how a Home Loan EMI Calculator works and how to use it to your advantage, utilise it for loan calculations when required. Use the EMI Calculator on the website or app of a trusted bank like ICICI Bank and plan your repayment before applying. Just get the results by entering the loan amount, tenure and applicable interest rate.  

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