Home Loan EMI Calculator: Check Eligibility & Tax Benefits

The Complete Guide to Home Loans in India

Buying a home is the biggest financial decision in an Indian's life. While the emotion of owning a house is great, the math behind the loan can be tricky. A Home Loan is a secured loan where the property itself acts as collateral. If you fail to repay, the bank has the legal right to seize and sell the property (under the SARFAESI Act).

1. The "Hidden" Cost of Long Tenure

Banks often encourage you to take a 30-year loan to reduce your EMI. Do not fall for this trap.

          The Math:

          • 20 Year Loan: Interest Payable = 108% of Loan Amount.

          • 30 Year Loan: Interest Payable = 170% of Loan Amount.

          Just by extending the tenure by 10 years, you pay nearly double the interest. Always try to limit your tenure to 15 or 20 years maximum.

Tax Benefits: How to Save ₹3.5 Lakhs/Year

The government effectively subsidizes your home loan through tax deductions. If planned well, your "effective" interest rate can drop from 8.5% to around 6%.

Section	Deduction Limit	Applicability
80C (Principal)	₹1.5 Lakhs	Included in the overall 80C limit (with PPF/ELSS).
24(b) (Interest)	₹2.0 Lakhs	For Self-Occupied properties.
80EEA (Extra)	₹1.5 Lakhs	For First-time buyers (Property value < ₹45L).

Pradhan Mantri Awas Yojana (PMAY)

If you are a first-time home buyer with an annual income below ₹18 Lakhs, you might be eligible for the Credit Linked Subsidy Scheme (CLSS).

Subsidy Amount: Up to ₹2.67 Lakhs upfront.
Impact: The subsidy is deducted from your principal amount immediately. This reduces your EMI burden for the entire 20-year tenure.
Process: You don't apply separately; your bank (lender) processes this claim with the NHB (National Housing Bank).

Repo Rate vs. MCLR: Know Your Benchmark

Since October 2019, all new floating rate home loans are linked to an external benchmark, usually the Repo Rate (RLLR).

Why this matters:
In the old MCLR system, banks were slow to pass on rate cuts to borrowers. Under RLLR, if RBI cuts the repo rate by 0.25%, your home loan rate must drop by 0.25% within 3 months. This ensures transparency.
Tip: If you are still on an old Base Rate or MCLR loan, ask your bank to switch you to RLLR immediately.

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Disclaimer & Risk Warning

Educational Use Only: This tool provides estimates based on standard amortization formulas. Actual loan terms depend on your Credit Score (CIBIL), income, and bank policies.