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An Equated Monthly Instalment (EMI) is the fixed amount you repay every month on a loan — home, car, or personal — until it is fully paid off. Each EMI has two parts: interest on the outstanding balance, and repayment of principal. In the early years most of your EMI goes toward interest; over time, the principal portion grows.
Your EMI depends on three inputs: the loan amount (principal), the interest rate, and the tenure. It is derived using the standard reducing-balance formula, where a higher rate or larger loan raises the EMI, while a longer tenure lowers the monthly EMI — but increases the total interest you pay over the life of the loan.
Lenders commonly use a Fixed Obligation to Income Ratio (FOIR) approach: they cap the total of all your monthly EMIs — including the new home loan — at a percentage of your net monthly income, typically in the 40–55% range depending on the lender, your income level and credit profile. The maximum EMI you can afford is then used to work backward, via the standard EMI formula, to the maximum loan amount at your chosen interest rate and tenure.
For salaried applicants, lenders generally use net take-home pay. For business or self-employed applicants, lenders typically average net profit from the last 2–3 years' Income Tax Returns rather than turnover, and often apply a more conservative FOIR to account for income variability — two applicants with identical declared annual income can therefore see different eligible loan amounts depending on how that income is earned.
This is one input among several. Age (which caps the maximum tenure), existing credit score, a co-applicant's income (which can be combined to raise eligibility), and the property's loan-to-value cap all affect what a specific lender will actually offer.
A ₹30,00,000 home loan at 8.5% p.a. for 20 years:
Monthly EMI: ≈ ₹26,035 • Total interest over 20 years: ≈ ₹32.5 lakh • Total repayment: ≈ ₹62.5 lakh. Shortening the tenure to 15 years raises the EMI but saves several lakh in interest.
Choose the loan type, then set the amount, interest rate, and tenure. The calculator shows your monthly EMI, total interest, and total repayment, so you can test different tenures before you borrow. Switch to "Check Home Loan Eligibility" to work in the other direction — enter your income and existing obligations to estimate the maximum loan you might qualify for.
You can lower the EMI by choosing a longer tenure, negotiating a lower rate, making a larger down payment, or refinancing to a cheaper lender. Remember that a longer tenure lowers the EMI but raises total interest.
Yes, significantly — especially early in the loan. Because interest is charged on the outstanding principal, prepaying reduces both your future interest and, if you keep the EMI the same, your remaining tenure.
A fixed rate keeps your EMI predictable; a floating rate moves with the market and can fall (or rise) over time. Floating rates are common for home loans in India and often work out cheaper over a long tenure, but carry rate risk.
Banks don't publish their FOIR publicly — it's part of internal credit policy, not an RBI-mandated figure. The most reliable ways to find yours: check the lender's own online eligibility calculator (it applies their FOIR behind the scenes, even if it doesn't show the percentage), ask a loan officer during a pre-approval enquiry, or compare a few lenders through a loan aggregator site. As a rough pattern, FOIR often runs lower (around 40%) for lower income brackets and higher (up to 55–65%) for high earners, with self-employed applicants typically assessed a few percentage points more conservatively than salaried applicants at the same income.
No. This calculator applies a simplified FOIR-based formula to illustrate how income, existing obligations and tenure interact. Actual eligibility is determined by the specific lender's underwriting policy, which also weighs credit score, employment stability, age, co-applicant income and the property's loan-to-value limits. Treat the result as a starting estimate to plan around, not a sanction or offer.
