How the calculator works

1. The EMI formula

Indian home loans use monthly reducing-balance interest. The equated monthly instalment is:

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

• P is the principal — the amount actually disbursed.
• r is the monthly rate: the annual rate divided by 12, then by 100. At 8.5% a year, r = 0.0070833.
• n is the tenure in months. 20 years is 240 months.

At ₹50,00,000 for 20 years at 8.5%, that gives an EMI of about ₹43,391. If r is zero, the EMI is simply P ÷ n.

2. What happens each month

The schedule is simulated one month at a time, in this fixed order. Getting the order right matters — applying a round-up before the extra amount, for example, would double-count it.

1. Take the opening principal for the month.
2. Subtract eligible parked cash (overdraft accounts only) to get the interest-bearing balance, floored at zero.
3. Determine the rate applicable for that month, after any rate cut has taken effect.
4. Interest for the month = interest-bearing balance × monthly rate.
5. Take the scheduled EMI.
6. Apply the annual step-up if a new loan year has just begun.
7. Add the fixed monthly extra payment.
8. Apply the round-up to the combined outgo, without double-counting the extra.
9. Add one extra EMI if this is the configured month within the loan year.
10. Add the one-time lump sum if this is its configured month.
11. Cap the total payment at exactly the amount needed to close the loan — the remaining principal plus that month's interest.
12. Principal repaid = payment − interest. Closing balance = opening − principal repaid, never below zero.

3. Strategy timing

• Loan years are counted from month 1 of the loan, not from January. The bonus-EMI selector is labelled "payment month within each loan year" for that reason — Month 10 of a loan disbursed in June is March.
• A step-up raises the EMI at the start of each new loan year and stays raised.
• A lump sum is applied in the last month of the year you choose.
• A rate cut applies only if the new rate is positive and lower than the current one, and takes effect from the year you set. Your EMI is kept unchanged, so the whole discount goes to principal.
• Overdraft parked cash is treated as withdrawable money of yours that reduces the interest base while it sits there. It is not a repayment and is excluded from the outflow total.

4. Assumptions

• Prepayments reduce tenure, not EMI. This is the default at most Indian lenders and produces the larger saving.
• Assumes an individual floating-rate home loan used for non-business purposes and no applicable prepayment charges. Fixed-rate and other loan categories may have different terms.
• The interest rate is held constant unless you explicitly model a rate cut. Real floating rates move with the external benchmark.
• Processing fees, insurance premiums, stamp duty and part-disbursement during construction are not modelled.
• Tax deductions under Sections 24(b) and 80C are not netted off. Prepaying reduces your deductible interest, so your after-tax saving is somewhat smaller than the headline figure.
• Calculations use full precision internally. Rupee values shown on screen are rounded for readability.

5. Checking it yourself

The schedule section exports a CSV with every month's opening balance, interest, principal and closing balance. The monthly figures add up to the totals shown on the cards, and the final closing balance is exactly zero. If your lender's statement differs materially, the usual causes are a different day-count convention, a rate reset you have not accounted for, or fees added to the principal.

Read the disclaimer before acting on any figure here.