Home Loan Prepayment Calculator
See impact of prepayments on your home loan
Inputs
ConfigurableChange the mode, strategy, or scenario after entering the core loan numbers.
Results
ProjectedYearly Principal vs Interest vs Prepayment
ChartFormula usedEMI, balance-reduction simulation, and reverse prepayment solver
The calculator starts with the standard EMI formula, then simulates the outstanding balance month by month after each scheduled EMI and any extra prepayment. Goal mode reruns the same engine to solve for the minimum prepayment required to hit a target interest saving or tenure reduction.
AssumptionsBase scenario
- The quoted interest rate is treated as constant over the modeled loan term.
- Prepayments are assumed to be applied exactly at the selected start year and frequency.
- Scenario bands shift only the loan rate assumption; cadence and strategy stay unchanged.
- Bank processing fees, administrative delays, and penalties are excluded unless handled manually outside the calculator.
- Uses the exact current interest rate, strategy, and prepayment timing.
Limits and freshnessUpdated 2026-04-03
- Floating-rate resets and lender-specific repricing rules are not modeled in the base engine.
- Some lenders may not reduce EMI or tenure exactly as assumed after prepayment.
- Tax effects from home-loan deductions are not included when comparing strategies.
- Reverse-goal results are numerical solves against the simulation engine, so highly granular lender rules may produce different real-world outcomes.
Compare reduce-tenure and reduce-EMI strategies side by side before choosing, because the cheaper-looking EMI option may save less total interest.
Year-by-Year Breakdown
Table| Year | Opening Bal | Principal | Interest | Prepayment | Closing Bal |
|---|---|---|---|---|---|
| 1 | ₹50,00,000 | ₹99,511 | ₹4,21,182 | — | ₹49,00,489 |
| 2 | ₹49,00,489 | ₹1,08,307 | ₹4,12,387 | — | ₹47,92,181 |
| 3 | ₹47,92,181 | ₹1,34,028 | ₹3,86,666 | ₹2,00,000 | ₹44,58,153 |
| 4 | ₹44,58,153 | ₹1,47,406 | ₹3,73,288 | — | ₹43,10,747 |
| 5 | ₹43,10,747 | ₹1,60,435 | ₹3,60,259 | — | ₹41,50,312 |
| 6 | ₹41,50,312 | ₹1,74,616 | ₹3,46,078 | — | ₹39,75,696 |
| 7 | ₹39,75,696 | ₹1,90,051 | ₹3,30,643 | — | ₹37,85,646 |
| 8 | ₹37,85,646 | ₹2,06,849 | ₹3,13,845 | — | ₹35,78,796 |
| 9 | ₹35,78,796 | ₹2,25,133 | ₹2,95,561 | — | ₹33,53,663 |
| 10 | ₹33,53,663 | ₹2,45,033 | ₹2,75,661 | — | ₹31,08,631 |
| 11 | ₹31,08,631 | ₹2,66,691 | ₹2,54,003 | — | ₹28,41,939 |
| 12 | ₹28,41,939 | ₹2,90,264 | ₹2,30,430 | — | ₹25,51,675 |
| 13 | ₹25,51,675 | ₹3,15,921 | ₹2,04,773 | — | ₹22,35,754 |
| 14 | ₹22,35,754 | ₹3,43,846 | ₹1,76,848 | — | ₹18,91,908 |
| 15 | ₹18,91,908 | ₹3,74,239 | ₹1,46,455 | — | ₹15,17,670 |
| 16 | ₹15,17,670 | ₹4,07,318 | ₹1,13,376 | — | ₹11,10,352 |
| 17 | ₹11,10,352 | ₹4,43,321 | ₹77,373 | — | ₹6,67,031 |
| 18 | ₹6,67,031 | ₹4,82,507 | ₹38,187 | — | ₹1,84,525 |
| 19 | ₹1,84,525 | ₹1,84,525 | ₹3,533 | — | ₹0 |
Assumptions and methodology
Transparent calculation notes for Home Loan Prepayment Calculator.
Formula used
The calculator first computes the normal EMI, then simulates outstanding balance after EMIs and prepayments.
Methodology
- Build the original amortization path.
- Apply the selected prepayment amount at the selected start year and frequency.
- Compare total interest, EMI, and tenure before and after prepayment.
Core assumptions
- Interest rate stays constant during the simulation.
- Prepayments are applied exactly as selected.
- The selected lender strategy is either reduce tenure or reduce EMI.
Not included
- Floating-rate resets, tax benefits, lender processing delays, and prepayment fees are excluded.
- Actual bank recalculation can differ from the simplified model.
About Home Loan Prepayment Calculator
Guide1What is Home Loan Prepayment?
Home loan prepayment refers to paying an amount over and above your regular EMI to reduce the outstanding principal. This can be done as a lump sum (partial prepayment) or by increasing your EMI amount. Prepayment is one of the most effective ways to reduce the total interest burden on a home loan.
Since home loans in India typically run for 15-30 years, even small prepayments in the early years can save lakhs of rupees in interest due to the compounding effect.
2How Prepayment Saves You Money
When you make a prepayment, the entire amount goes toward reducing the principal. This has a cascading effect:
- Reduced Principal: The outstanding loan amount decreases immediately
- Lower Interest: Future interest is calculated on the reduced principal
- Shorter Tenure or Lower EMI: You can choose to reduce either the tenure or the EMI amount
For example, a one-time prepayment of ₹5 lakh on a ₹50 lakh home loan at 8.5% can save approximately ₹8-12 lakh in interest and reduce the tenure by 3-5 years.
3How to Use This Prepayment Calculator
- Step 1: Enter your original loan details — amount, interest rate, and tenure
- Step 2: Specify the prepayment amount and when you plan to make it
- Step 3: Choose whether to reduce tenure or reduce EMI after prepayment
- Step 4: Compare the total interest with and without prepayment
4Prepayment Rules in India
- Floating Rate Loans: RBI mandates zero prepayment charges for individual borrowers on floating rate home loans
- Fixed Rate Loans: Banks may charge up to 2% prepayment penalty
- Tax Impact: Prepaying reduces your outstanding principal, which may reduce the interest you can claim under Section 24(b) in future years
- Minimum Amount: Some banks require a minimum prepayment amount (e.g., equivalent to 1-3 EMIs)