A mortgage is a loan, yes. But the size of it, the length of it, and the security (the house itself) make it a different beast from a personal loan. The math is the same EMI formula, but the decisions around it deserve their own calculator.
Open the Mortgage calculator to model your own numbers.
The headline numbers
For a ₹75 lakh home loan at 8.5% for 25 years:
- Monthly EMI: ₹60,463
- Total interest paid: ₹1.06 crore (yes, more than the principal)
- Total amount paid: ₹1.81 crore
That's the part most calculators stop at. The interesting numbers come from running scenarios.
Three scenarios that change everything
Scenario 1: Pay 1 extra EMI per year
That's ₹60,463 extra annually — a 13th payment. The math:
- Loan ends ~4 years earlier (year 21 vs year 25)
- Interest saved: ~₹17 lakh
You're paying 8.3% more per year for an equivalent of 17% off the total cost. Best ROI a homeowner can buy.
Scenario 2: Lump-sum prepayment of ₹5 lakh in year 3
After 3 years your balance has barely moved (you've paid ~₹2 lakh of principal out of 75 lakh; the rest is interest). A ₹5 lakh prepayment now:
- Loan ends ~2.5 years earlier
- Interest saved: ~₹12 lakh
A 240% return on the prepayment. Almost no other investment beats this.
Scenario 3: Switch from 25 to 20 years upfront
Same loan, 5 years shorter:
- EMI rises from ₹60,463 → ₹65,070 (+7.6%)
- Total interest: ₹1.06 cr → ₹81 lakh (saves ₹25 lakh)
If you can afford the higher EMI, the shorter tenure is always the better long-run trade.
The buy-vs-rent question
A separate calculator — Home Loan vs Rent — handles this. Short answer: in most Indian metro cities, buying makes sense if you'll stay 8+ years and the rental yield is below 3%. Otherwise renting + investing the difference frequently wins.
Three rules of thumb
- Keep total EMI commitments under 40% of net income. Banks will lend up to 65%; that's the path to "house poor".
- Loan-to-value (LTV) under 80% keeps you out of the highest interest tiers and reduces stress if prices dip.
- Pre-EMI interest is taxable. Section 24(b) gives up to ₹2 lakh deduction on home-loan interest (self-occupied) — factor it in.
Run yours
Open the Mortgage Calculator. Adjust the prepayment slider. Pick the scenario your future self will thank you for.
