I am currently planning to buy a house in Delhi and have been exploring the financial gateways to do so. I had so many questions and one of them was how to calculate EMI for housing loan. I know there are calculators and it depends on the loan amount yet I wanted an answer from someone who was seasoned in such things. So I contacted my bank and talked to an agent to figure it out. I can share a few things he explained to me here.
How much EMI for home loan?Banks have their own formula to calculate EMI for housing loan. I was told that the formula to calculate EMI is -
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Here P, R and N are variables, i.e., the principal amount, rate of interest and number of years. EMI can change if you change the loan tenure, rate of interest or principal amount.
Usually, EMIs are fixed but there can be situations where EMI may vary. How does that happen?
This can happen if you opt for a floating rate of interest. Floating rate of interest keeps changing as per the prevailing market rates.
Check out what is the difference between floating rate of interest and fixed rate of interestI will share an example with you to understand
how much emi for home loan has to be paid.
Let’s say you apply for a home loan of Rs. 30,00,000 so the EMI calculation will be as follows:
P= 30,00,000
R = 6.70%
N = 20 years
EMI = [3000000 x 6.70/100 x (1+6.70/100)^20]/[(1+6.70/100)^20-1]
EMI = Rs. 22,722
You can check your loan eligibility and best home loan offers on NoBroker Home Loan Services You might like these: What is EMI for 50 lakhs home loan How to reduce EMI of existing loan What happens if EMI is not paidYour Feedback Matters! How was this Answer?
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Authors Of The Question
How to calculate EMI for housing loan?
Nishkarsh
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1 Answers
3 Year
2021-10-05T11:26:56+00:00 2021-10-05T14:21:29+00:00Comment
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