EMI Calculation
Equated Monthly Instalment — the fixed monthly payment comprising principal and interest for a home loan. Formula: EMI = P × r × (1+r)^n / ((1+r)^n - 1).
What is EMI?
An Equated Monthly Instalment (EMI) is the fixed amount a borrower pays each month over the tenure of a home loan. Each EMI comprises two components: interest on the outstanding principal, and principal repayment. In early years of a loan, most of the EMI goes to interest; as tenure progresses, more goes to principal — this is called the amortisation curve.
EMI Formula
The standard formula for EMI calculation:
EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1)
Where:
- P = Principal loan amount (e.g., Rs 70 lakh)
- r = Monthly interest rate (annual rate ÷ 12; for 9% p.a., r = 0.75%)
- n = Total number of monthly instalments (20 years = 240 months)
Worked Example
Rs 70 lakh home loan at 9% p.a. for 20 years:
- P = 70,00,000
- r = 0.09/12 = 0.0075
- n = 240
- EMI = 70,00,000 × 0.0075 × (1.0075)^240 ÷ ((1.0075)^240 − 1)
- EMI ≈ Rs 62,979 per month
Quick rule of thumb: at 9% interest, every Rs 1 lakh of loan requires approximately Rs 900/month EMI for 20-year tenure.
Impact of Rate and Tenure
| Loan (Rs L) | Rate | 20-yr EMI | 25-yr EMI |
|---|---|---|---|
| 50L | 9% | Rs 44,986 | Rs 41,960 |
| 70L | 9% | Rs 62,979 | Rs 58,744 |
| 1 Cr | 9% | Rs 89,973 | Rs 83,920 |
Prepayment Impact
Prepaying even 5–10% of the outstanding principal in the first 5 years dramatically reduces total interest paid. On a Rs 70 lakh loan at 9%, prepaying Rs 5 lakh in year 3 reduces the remaining tenure by 2.5 years and saves approximately Rs 8–10 lakh in interest. RBI rules prohibit floating-rate home loan prepayment penalties — banks cannot charge a fee for partial prepayment.
How Brickplot Uses EMI Data
Brickplot EMI calculator at brickplot.com/tools/emi-calculator/ lets buyers compute EMI, total interest outflow, and amortisation schedule. Our project pages also show the estimated EMI range for a typical buyer at 80% LTV financing, helping buyers quickly assess affordability before enquiring.
Related Terms
- Home Loan Eligibility — determines the loan amount driving the EMI
- Section 80C Home Loan Tax Benefit — tax deductions that partially offset EMI cost
Related terms
Brickplot verifies emi calculation disclosures on every reviewed project as part of the independent 11-axis score. No builder commissions. No editorial override.