Home Loan EMI Calculator: see your real cost after tax savings.

How to calculate home loan EMI

EMI (equated monthly instalment) is the same payment that you make each month. It pays the interest for that month and a part of the principal. The formula is:

EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)

where:
  P = principal loan amount
  r = monthly interest rate (annual rate ÷ 12 ÷ 100)
  n = tenure in months

Example: you borrow ₹50 lakh at 8.5% interest for 20 years. The EMI is ₹43,391 each month. In 240 months, you pay ₹54.1 lakh of interest. This interest is more than the loan.

The tax deductions in this calculator

The Income-tax Act, 2025 gives three deductions that are important to home loan borrowers. The old section numbers from the 1961 Act are in brackets, because many persons know these numbers.

Section 22 (24(b) in the 1961 Act): interest deduction

For a home that you live in, you can deduct a maximum of ₹2,00,000 of interest each year from your taxable income. For a home that you rent to a tenant, the deduction has no limit. But the loss that you can set off against other income has a limit of ₹2 lakh.

Section 123 (80C in the 1961 Act): principal deduction

You can deduct a maximum of ₹1,50,000 of principal each year. But this limit also includes PPF, ELSS, EPF, life insurance and other investments. Many borrowers who get a salary use part of this limit for these items. Thus, the deduction for home loan principal is frequently less than ₹1.5 lakh.

Section 131 (80EEA in the 1961 Act): closed to new loans

Section 80EEA gave first-time buyers ₹1,50,000 more interest deduction each year. The stamp duty value of the property was a maximum of ₹45 lakh. This deduction is not open to new loans. It applied only to loans that a lender sanctioned from 1 April 2019 to 31 March 2022, and the government did not extend it.

If your loan is from this period, you can continue to claim the deduction until you repay the loan. For other loans, the deduction does not apply, and the calculators on this page do not include it. The deduction is only for the old regime. Source: Income Tax Act, 1961 — s.80EEA · verification date July 2026

Old tax regime or new tax regime with a home loan

The new tax regime (section 202 of the 2025 Act, 115BAC in the 1961 Act) has lower slab rates. But it does not let you deduct home loan interest or principal for a home that you live in. Thus, the correct regime for you changes with the total of your deductions:

• The old regime is usually better if you claim the full ₹2 lakh interest deduction, the full ₹1.5 lakh principal deduction, and HRA. These deductions can decrease your tax more than the lower slab rates can.
• The new regime is usually better if your loan is small and the interest is low. It is also usually better if you have no other investments for the principal limit, or if your income is low.

Calculate your tax with the two regimes. For most borrowers in the 20% or 30% slab with a loan of more than ₹25 lakh, the old regime gives a lower tax. But this is not always correct.

Costs that this calculator does not include

The EMI on this page includes only principal and interest. A home loan also has these costs:

• Processing fee: usually 0.25% to 1% of the loan, paid at the start
• Stamp duty and registration: the rate changes from state to state, usually 5% to 8% of the property value
• GST on a property under construction: 1% for affordable housing, 5% for other properties
• Property insurance: many lenders make this a condition of the loan
• Loan protection insurance: some lenders tell you that this is necessary, but usually it is optional
• Property tax, society maintenance and repairs: costs that continue for all the time that you have the home

If you compare a home loan EMI with rent, include these costs. The EMI is only one part of the cost.