What is the difference between a fixed and floating rate mortgage?

A fixed-rate mortgage locks in your interest rate for the entire tenure or for an initial period, giving you payment predictability. A floating-rate (variable) mortgage is linked to a benchmark like the repo rate and changes as market rates move. In India, most home loans are floating-rate. If repo rates fall, your EMI drops. If they rise, your EMI increases. This calculator assumes a fixed rate - recalculate whenever your bank revises your floating rate.

Mortgage Calculator

Q: What is the maximum tenure for a mortgage in India?

Most Indian banks and housing finance companies offer home loans for up to 30 years, provided the loan is repaid before the borrower turns 70-75. Longer tenures reduce the monthly EMI but significantly increase total interest paid. A 30-year tenure typically results in paying more than double the original principal in total repayments.

Q: What percentage of the property value can I borrow?

RBI guidelines cap home loan LTV (Loan-to-Value) ratios at 90% for loans up to ₹30 lakhs, 80% for loans between ₹30-75 lakhs, and 75% for loans above ₹75 lakhs. In practice, most lenders use a down payment of 20-25% as the standard. A higher down payment gets you a better interest rate and lower EMI.

Q: How much mortgage can I afford on a ₹1 lakh monthly salary?

A common rule is to keep total housing costs (EMI + insurance + maintenance) below 30–40% of gross monthly income. On ₹1,00,000/month salary, that means a maximum EMI of ₹30,000–₹40,000. At 9% for 20 years, an EMI of ₹35,000 supports a loan of approximately ₹38–40 lakhs. Factor in your existing EMIs - lenders typically cap total debt obligations (including the new mortgage) at 50% of gross income.

Q: Is it better to choose a shorter mortgage term?

A shorter term (e.g. 10 or 15 years) means significantly higher monthly payments but much lower total interest paid. Example: ₹50L at 9% - 20-year term: EMI ₹45,000, total interest ≈ ₹58L. 10-year term: EMI ₹63,400, total interest ≈ ₹26L. You pay ₹32L less in interest by choosing 10 years. Choose the shorter term if your income can comfortably sustain the higher EMI and you have an emergency fund in place.

Find your monthly mortgage payment and total cost of your home loan.

Property Value ₹37.50 L

₹

₹5 L₹1 Cr

Down Payment 20%

5%80%

Annual Interest Rate 8.5%

% p.a.

5%15%

Loan Tenure 20 Years

Yrs

5 Years30 Years

Monthly EMI

—

Loan Amount

—

Total Interest

—

Total Payment

—

📊 Amortization Summary

🏠 What is a Mortgage?

A mortgage is a long-term loan secured against real property - in this case, the home you intend to purchase. The word comes from an Old French term meaning "death pledge," reflecting the idea that the obligation ends either when the debt is fully repaid or the property is forfeited. Today, mortgages are the most common way that individuals and families finance the purchase of residential property worldwide.

When you take a mortgage, the lender (bank or housing finance company) pays the seller the purchase price on your behalf. You then repay the lender in equal monthly instalments - called EMIs - over a period of 5 to 30 years. Each EMI payment includes two components: an interest charge (the cost of borrowing) and a principal repayment (reducing your outstanding loan balance). In the early years of a mortgage, the majority of each payment goes toward interest. As the loan matures, an increasing share goes toward principal.

In India, home loans (the local term for mortgages) are the largest retail lending product by volume. The Reserve Bank of India regulates LTV ratios and risk weights. Most home loans are floating-rate, meaning the interest rate adjusts with the RBI repo rate. Typical tenures range from 10 to 25 years, with some lenders extending to 30 years for younger borrowers. The maximum loan amount depends on your income, creditworthiness (CIBIL score), and the property's market value.

This mortgage calculator uses the standard reducing-balance EMI formula used by all Indian banks and international lenders. It calculates your exact monthly payment, total interest, and full amortization schedule - helping you plan your home purchase with complete financial clarity.

📐 Mortgage EMI Formula

The mortgage EMI is calculated using the standard reducing-balance formula:

EMI = [P × R × (1+R)^N] / [(1+R)^N − 1]

P = Loan amount = Property Value − Down Payment

R = Monthly interest rate = Annual Rate ÷ 12 ÷ 100

N = Total months = Tenure (years) × 12

Down Payment = Property Value × Down Payment %

The loan amount (P) is the property value minus the down payment. If you purchase a property worth ₹50 lakhs with a 20% down payment, you pay ₹10 lakhs upfront and borrow ₹40 lakhs. The EMI formula then computes the fixed monthly payment that amortizes this ₹40 lakh loan to zero over the chosen tenure.

Total Interest = (EMI × N) − P. This represents the total cost of borrowing over the life of the loan - often a substantial figure that surprises first-time homebuyers. Understanding this number is crucial to choosing the right tenure and down payment amount.

📖 How to Use This Calculator

Steps to Calculate Your Mortgage

Enter the property value - the full purchase price of the home you plan to buy, not the loan amount.

Set the down payment percentage - the portion you will pay upfront. The calculator automatically computes the loan amount (Property Value minus Down Payment).

Enter the annual interest rate - check your bank's current home loan rates or your offer letter. Floating rates typically range from 8.5% to 10.5% in India.

Set the loan tenure in years - try different tenures to see the trade-off between monthly EMI and total interest paid.

Click Calculate Mortgage to see your monthly EMI, total interest, total repayment amount, and a full year-by-year amortization schedule.

💡 Example Calculations

Example 1 - Apartment in a Metro City

Property: ₹75 lakhs | Down Payment: 20% | Rate: 8.75% | Tenure: 20 years

Down Payment = 75,00,000 × 20% = ₹15,00,000. Loan Amount (P) = ₹60,00,000

Monthly Rate (R) = 8.75 ÷ 12 ÷ 100 = 0.007292 · N = 20 × 12 = 240 months

(1.007292)^240 = 5.573 · EMI = [60,00,000 × 0.007292 × 5.573] / [5.573 − 1] = 2,44,028 / 4.573

Monthly EMI ≈ ₹53,361 · Total Interest ≈ ₹68,06,640 · Total Payable ≈ ₹1,28,06,640

Try this example →

Example 2 - Budget Home in a Tier-2 City

Property: ₹35 lakhs | Down Payment: 25% | Rate: 9.0% | Tenure: 15 years

Down Payment = 35,00,000 × 25% = ₹8,75,000. Loan Amount (P) = ₹26,25,000

Monthly Rate (R) = 9.0 ÷ 12 ÷ 100 = 0.0075 · N = 15 × 12 = 180 months

(1.0075)^180 = 3.838 · EMI = [26,25,000 × 0.0075 × 3.838] / [3.838 − 1] = 75,563 / 2.838

Monthly EMI ≈ ₹26,624 · Total Interest ≈ ₹21,72,320 · Total Payable ≈ ₹47,97,320

Try this example →

❓ Frequently Asked Questions

What is a mortgage and how does it differ from a home loan?+

A mortgage is a loan secured against the property you are purchasing. In India the term 'home loan' is more common, but both refer to the same product. You borrow money to buy property, the property serves as collateral, and you repay in monthly instalments over the loan tenure. The EMI formula and repayment mechanics are identical worldwide.

What is the maximum tenure for a mortgage in India?+

Most Indian banks offer home loans for up to 30 years, provided the loan is fully repaid before the borrower turns 70-75. Longer tenures reduce your monthly EMI but significantly increase total interest paid. A 30-year tenure typically results in paying more than double the original principal in total repayments compared to a 15-year tenure.

How much down payment is required for a home loan?+

RBI guidelines cap home loan LTV ratios at 90% for loans up to ₹30 lakhs, 80% for ₹30-75 lakhs, and 75% for loans above ₹75 lakhs. In practice, most lenders require 20-25% as down payment. A higher down payment lowers your EMI, reduces total interest, eliminates any mortgage insurance, and often gets you a better interest rate.

Is mortgage interest tax deductible in India?+

Yes. Under Section 24(b) of the Income Tax Act, you can claim a deduction of up to ₹2 lakh per year on interest paid for a self-occupied property. Under Section 80C, principal repayments up to ₹1.5 lakh per year are deductible. For let-out properties, the entire interest paid is deductible. These benefits significantly reduce the effective cost of a home loan.

Should I prepay my mortgage or invest the surplus?+

This depends on your home loan rate versus your expected investment return. If your mortgage rate is 9% and you can earn 12%+ in equity mutual funds via SIP, investing the surplus may be more beneficial long-term. However, prepayment reduces guaranteed debt at a known rate, while investment returns are uncertain. Most advisors recommend building an emergency fund first, then splitting surplus between prepayment and investment based on your risk tolerance.

How much mortgage can I afford on a ₹1 lakh monthly salary?+

A common rule is to keep total housing costs below 30–40% of gross monthly income. On ₹1,00,000/month salary, that means a maximum EMI of ₹30,000–₹40,000. At 9% for 20 years, an EMI of ₹35,000 supports a loan of approximately ₹38–40 lakhs. Factor in your existing EMIs - lenders typically cap total debt obligations at 50% of gross income. A ₹1L salary buyer in most metros will find this challenging without a substantial down payment.

Is a shorter mortgage term worth the higher EMI?+

Yes, almost always - if your budget allows. Example: ₹50L at 9%. 20-year term: EMI ₹45,000, total interest ≈ ₹58L. 10-year term: EMI ₹63,400, total interest ≈ ₹26L. You pay ₹32L less in interest with the 10-year term. The higher EMI is ₹18,400/month more, but you save ₹32L over the tenure. Choose the shorter term if your income comfortably supports the higher EMI and you maintain a 3–6 month emergency fund.

How does a 30-year vs 15-year mortgage compare in total cost?+

A 15-year mortgage has a higher monthly payment but saves dramatically on total interest. On a $300,000 loan at 7%: the 30-year costs $418,000 in interest; the 15-year costs $186,000 - saving $232,000. The 15-year monthly payment is about 50% higher, but the total cost is 44% lower.

How much home loan can I get based on my salary in India?+

Most banks allow EMI up to 40-50% of net monthly income. On a Rs 1 lakh net salary, maximum EMI = Rs 40,000-50,000. At 8.5% for 20 years, this supports a loan of Rs 46-58 lakh. A co-applicant (working spouse) adds their income, significantly increasing eligibility. Banks also consider credit score, existing liabilities, and job stability.