What is the EMI on a ₹20 lakh home loan?

At 8.5% over 20 years, a ₹20,00,000 home loan costs ₹17,356 a month. Over the full term you repay ₹41,65,440, of which ₹21,65,440 is interest. Over 30 years the EMI falls to ₹15,378 and the interest rises to ₹35,36,080; over 15 years the EMI is ₹19,695. The rate is an example: use your own quote.

The EMI on ₹20 lakh by tenure

All at 8.5%, only the term changing: over 10 years, an EMI of ₹24,797 and ₹9,75,640 of total interest. Over 15 years, ₹19,695 and ₹15,45,100. Over 20 years, ₹17,356 and ₹21,65,440. Over 25 years, ₹16,105 and ₹28,31,500. Over 30 years, ₹15,378 and ₹35,36,080.

A longer term lowers the EMI and raises the total interest, because the same money is borrowed for longer. Which of the two matters more depends on how much room your month has, which only you know.

EMI = P × i × (1 + i)^n / ((1 + i)^n − 1), where i = 8.5% ÷ 12 and n = 240 months

The same loan at different rates

Over 20 years, at example rates rather than any lender’s quote: 8% → ₹16,729 a month. 8.5% → ₹17,356. 9% → ₹17,995. 9.5% → ₹18,643. Most home loans in India are on floating rates, so the rate you start on is rarely the one you finish on.

Where the first year of EMIs goes

In the first month, ₹14,167 of the ₹17,356 is interest and only ₹3,189 reduces the loan. Across the first year you pay ₹2,08,272 and the balance falls by ₹39,857.

After five years you still owe ₹17,62,496; after ten years, half the term, you owe ₹13,99,839. The balance falls slowly at first and fast at the end, because each month’s interest is charged on whatever is still outstanding.

The down payment a ₹20 lakh loan needs

RBI lets a home loan of up to ₹30 lakh cover as much as 90 per cent of the property’s value, so a ₹20,00,000 loan needs a home worth at least about ₹22.2 lakh and a down payment of at least about ₹2.2 lakh. A lender can fund less than that ceiling, and stamp duty and registration come on top and cannot be borrowed.

On a home costing more, the same ₹20 lakh loan simply means a larger down payment: on a ₹30,00,000 home it is ₹10,00,000 before those charges.

The salary it needs, and what prepaying does

Lenders test the EMI against net monthly income. Where total EMIs may take 50% of it, ₹17,356 needs about ₹34,712 a month; where they may take 40%, about ₹43,390. Any EMI you already pay comes out of the same allowance.

Adding ₹5,000 a month to the ₹17,356 from the start clears the loan 98 months sooner and cuts total interest by ₹9,84,912. A single ₹2,00,000 part payment in the first month clears it 53 months sooner and cuts ₹7,03,771. On a floating-rate loan taken by an individual, RBI bars any charge for prepaying.