Planning your home loan EMI
A home loan is the biggest EMI most families take on, so small changes matter. On a ₹50 lakh loan at 8.5%, a 20-year tenure means an EMI of about ₹43,391 and ₹54.1 lakh of interest. Stretching to 30 years cuts the EMI by about ₹5,000 but adds over ₹34 lakh in interest.
In the first year of that 20-year loan, about ₹4.21 lakh of your ₹5.21 lakh in payments goes to interest and only about ₹1 lakh reduces the loan. The schedule above shows how that balance shifts year by year.
How much should your EMI be?
Lenders usually let all your EMIs together take up 40–60% of take-home pay. To stay comfortable, many planners suggest keeping the home loan EMI within 30–35% of your monthly income. Check what you can borrow with the home loan eligibility calculator.
Tax benefits on a home loan
| Benefit | Old regime | New regime |
|---|---|---|
| Interest on self-occupied house (24b) | Up to ₹2 lakh | Not allowed |
| Principal repayment (80C) | Within the ₹1.5 lakh limit | Not allowed |
| Interest on a let-out house | Allowed; loss set-off up to ₹2 lakh | Allowed against rent; no set-off |
Compare both regimes with your home loan figures in the income tax calculator.
Costs not included in the EMI
- Down payment of 10–25% of the property value
- Stamp duty and registration, typically 5–8% depending on the state
- Processing fee, legal and valuation charges
- Home loan insurance, if you choose to buy it
Frequently asked questions
How much EMI for a ₹50 lakh home loan?
At 8.5% for 20 years, the EMI on ₹50 lakh is about ₹43,391 and you pay about ₹54.1 lakh in interest. At 30 years the EMI drops to about ₹38,446, but interest rises to about ₹88.4 lakh.
What tax benefits do I get on a home loan?
Under the old regime you can claim up to ₹2 lakh of interest on a self-occupied house (Section 24b) and up to ₹1.5 lakh of principal under Section 80C. The new regime gives no deduction for a self-occupied home.
Fixed or floating rate?
Most home loans in India are floating and linked to an external benchmark such as the RBI repo rate, so your EMI or tenure changes when rates change. Floating loans also have no prepayment penalty.
How can I reduce my home loan interest?
Make a bigger down payment, choose a shorter tenure, prepay whenever you get a bonus, and ask your bank to move you to its current lower rate or switch lenders if the gap is large.
Last reviewed: 13-10-2026. Rates and rules are checked against official sources; tell us if something has changed. Contact