What are the tax benefits on a home loan?

Home loans provide three tax deductions under the Old Tax Regime (not available in New Regime): Section 24(b) — Interest deduction: Self-occupied property: Max ₹2,00,000/year Let-out property: No upper limit (actual interest deductible) Under-construction property: Deduction starts only after construction completes (5-year pre-construction interest can be claimed in 5 equal instalments after completion) Section 80C — Principal repayment: Principal repaid during the year is eligible for deduction Combined with other 80C investments (PPF, ELSS, LIC, EPF) Overall 80C limit: ₹1,50,000/year Requires holding the property for 5 years — selling before 5 years reverses the 80C benefit Section 80EEA — First-time buyer (additional interest): Additional ₹1,50,000 interest deduction for first-time home buyers Stamp duty value of property ≤ ₹45 lakhs Loan sanctioned between 1 April 2019 and 31 March 2022 (extended scheme) You or your spouse/minor child should not own any other residential property At 30% tax slab with Rs 50L loan (Year 1): 24(b): Rs 2L deduction → saves Rs 60,000/year in tax 80C: Rs 99,511 principal → saves Rs 29,853/year Total tax saving: ~Rs 89,853 in Year 1 alone

What is the maximum home loan I can get based on my salary?

Banks typically follow these eligibility rules: Maximum EMI: 40-50% of net monthly take-home salary (after all deductions) Existing EMIs: Deducted from eligible EMI budget Credit score: Minimum 750 for best rates; below 650 often rejected LTV (Loan-to-Value): Depends on property value: Up to Rs 30 lakh: 90% LTV (10% down payment minimum) Rs 30L to Rs 75L: 80% LTV (20% down payment minimum) Above Rs 75L: 75% LTV (25% down payment minimum) Salary-based eligibility at 8.5%, 20 years (50% EMI rule): Salary Rs 30,000/mo → Max EMI Rs 15,000 → Max loan Rs 17.3L Salary Rs 50,000/mo → Max EMI Rs 25,000 → Max loan Rs 28.9L Salary Rs 75,000/mo → Max EMI Rs 37,500 → Max loan Rs 43.3L Salary Rs 1,00,000/mo → Max EMI Rs 50,000 → Max loan Rs 57.7L Salary Rs 1,50,000/mo → Max EMI Rs 75,000 → Max loan Rs 86.6L Salary Rs 2,00,000/mo → Max EMI Rs 1,00,000 → Max loan Rs 1.15Cr Joint home loans: Including co-applicant income can significantly increase eligibility. Spouse as co-applicant with separate income is the most common strategy. Self-employed: Banks look at 2-3 years of ITR and business income stability rather than salary slips.

Should I prepay my home loan or invest the money?

This is one of the most common financial planning questions. The answer depends on your specific situation: Prepay if: ✓ Your home loan rate > expected investment returns (after tax) ✓ At 30% tax slab: effective home loan cost = 8.5% × (1-0.30) = 5.95% (after 24(b) tax benefit). FD gives 7% pre-tax = 4.9% post-tax. So prepay beats FD. ✓ Against equity (12% expected): equity might win, but it's uncertain vs guaranteed interest saving ✓ You have excess beyond 6-month emergency fund and existing insurance ✓ You're in the last 40% of tenure (interest portion is declining; prepayment impact is lower but peace of mind is higher) ✓ Psychological peace of mind matters to you Invest instead if: ✓ Expected returns significantly exceed home loan cost (after tax) ✓ Equity funds at 12% CAGR vs effective loan cost of 5.95% — invest gives higher expected return ✓ You need liquidity — home loan prepayment is irreversible, equity can be redeemed ✓ You have Section 80C benefit from principal repayment — this effectively reduces loan cost further ✓ Your employer matches NPS contributions or you have ESOP options Prepayment timing matters: Prepaying Rs 5L at Month 60 on a Rs 50L/8.5%/20yr loan saves Rs 15.6L in interest. Prepaying the same at Month 120 saves less because interest portion of EMI has already declined. Practical hybrid: Continue regular EMI (maintains tax benefit), use annual bonus for partial prepayment.

What is the difference between fixed and floating rate home loans?

Floating Rate (EBR-linked) — the default in India: ✓ Rate changes when RBI repo rate changes ✓ When RBI cuts rates (monetary easing), your EMI reduces automatically ✗ Rate uncertainty — EMI may increase if RBI raises rates ✓ Currently mandated by RBI for all retail floating loans since Oct 2019 ✓ Can foreclose without prepayment penalty (for individuals from individuals, not from balance transfer) Fixed Rate: ✓ EMI doesn't change for the fixed period (typically 2-3 years, then auto-converts to floating) ✗ Higher starting rate than floating (typically 1-2% premium) ✗ Prepayment penalty may apply ✓ Suitable when you expect RBI to raise rates significantly Current scenario (Apr 2026): RBI Repo Rate: 6.25% Typical home loan EBR spread: 2-3% Result: Home loan rates = 8.25-9.25% for most borrowers External Benchmark Rate (EBR) system (since Oct 2019): All floating rate retail loans must be linked to external benchmarks: 1. RBI Repo Rate (most common) 2. 91-day T-Bill rate 3. 182-day T-Bill rate Banks can add their spread on top — this spread is fixed for the loan tenure. When RBI changes repo rate, your rate changes within 3 months (typically at the next EMI reset date).

How does balance transfer of home loan work? When should I do it?

Home loan balance transfer means moving your outstanding loan from one bank to another at a lower interest rate. How it works: 1. Get a balance transfer (BT) offer from a new lender at lower rate 2. New lender pays off your old lender 3. You repay the new lender at the new (lower) rate 4. Your property documents (original title deed, NOC, sale deed) move to the new lender When it makes financial sense: Rate difference: Meaningful savings require at least 0.5-1% rate reduction Outstanding tenure: More beneficial if 10+ years remaining (more interest to be saved) Time calculation: Monthly saving × remaining months > Transfer costs Costs to check: Processing fee: 0.5-1% of outstanding loan amount Legal charges: Rs 5,000-15,000 Stamp duty on new mortgage: varies by state (some states are 0%) Old bank foreclosure charges: NIL for floating rate loans (RBI rule), but get NOC fees Prepayment penalty from old bank: NIL for floating rate individuals Typical example: Outstanding: Rs 40L · Current rate: 9% · New rate: 8.25% Monthly saving: ~Rs 1,900/month Transfer cost: Rs 20,000-30,000 Break-even: ~13-16 months Total saving over 15yr remaining: ~Rs 3.4L minus transfer costs Note: After balance transfer, the new bank will also offer you the current market rate for fresh loans — so check if refinancing gives you a better deal than just negotiating with your existing bank (which is free to do).

HOME LOAN EMI CALCULATOR — INDIA

Calculate your home loan EMI with property value, down payment percentage, interest rate, and tenure. Auto-calculates loan amount from LTV. Four tabs: EMI Calculator (with 9 bank rate presets for Apr 2026, amortization schedule yearly/monthly toggle), Tax Benefits (year-wise Section 24(b) interest d...

HOME LOAN EMI

Property Value (₹)

Down Payment (20%)= ₹15.00 L

Loan amount: ₹60.00 L(LTV: 80% of property value)

Interest Rate (% p.a.)

Loan Tenure

Tax Slabfor 24(b) + 80C deductions

MONTHLY EMI

₹52,069

LOAN

₹60.00 L

INTEREST

₹64.97 L

TOTAL

₹1.25 Cr

You will pay ₹64.97 L (108.28% of loan) as interest over 20 years

✔ Estimated tax saving: ₹95,823/yr at 30% slab

LIVE DIAGRAM

MONTHLY HOME LOAN EMI

₹52,069

₹60.00 L loan · ₹64.97 L interest · ₹1.25 Cr total

TOTAL OUTFLOW SPLIT

48% principal

52% interest

OUTSTANDING BALANCE — BY YEAR

Start

Y10

Y20

✔ Tax saving Year 1: ₹95,823/yr (30% slab)

Sec 24(b): ₹2.00 L + Sec 80C: ₹1.19 L

Reducing balance · Equal monthly instalments · Interest front-loaded

Created with❤️byeaglecalculator.com

AMORTIZATION SCHEDULE

CURRENT HOME LOAN RATES (APR 2026)

Bank	Rate (p.a.)	Rate Type
SBI	8.5%	EBR-linked
HDFC Bank	8.75%	EBR-linked
ICICI Bank	8.75%	EBR-linked
Axis Bank	8.75%	EBR-linked
Kotak Bank	8.7%	EBR-linked
PNB	8.5%	EBR-linked
Bank of Baroda	8.4%	EBR-linked
LIC HFL	8.65%	Fixed+Float
Bajaj Housing	8.5%	EBR-linked

Rates as of Apr 2026 for salaried borrowers with credit score 750+ · EBR = External Benchmark Rate (RBI repo-linked) · Verify with lender before applying

HOW TO USE

1
Enter the property value and select your down payment percentage (10% to 40%). The loan amount is calculated automatically — shown in green below the down payment selector. Banks typically lend 80-90% of the property value (LTV ratio). RBI mandates: up to Rs 30L property — 90% LTV; Rs 30L-75L — 80% LTV; above Rs 75L — 75% LTV.
2
Set the interest rate using the 6 bank quick-select buttons (SBI, HDFC, ICICI, Axis, Kotak, PNB) showing current Apr 2026 rates, or type your own. Home loan rates in India are EBR-linked (External Benchmark Rate = RBI repo rate + spread) and change when the RBI changes the repo rate. Set your income tax slab to see the Section 24(b) and 80C tax benefit alongside the EMI.
3
Select the loan tenure (5 to 30 years). Shorter tenure = higher EMI but far less total interest. The red callout shows the total interest as a percentage of the loan — a critical number to understand the true cost of the loan. Toggle the Amortization Schedule to see yearly or monthly breakdowns.
4
Switch to the Tax Benefits tab to see year-wise Section 24(b) interest deduction (max Rs 2L/yr) and Section 80C principal repayment benefit, with exact tax saved at your slab. Note: these benefits are available only under the Old Tax Regime.
5
Use the Prepayment tab to see how much a lump sum prepayment saves in tenure and total interest. Use the Rate Comparison tab to compare your home loan at three different rates side by side — click any bank name to load ±0.25% rate variants for comparison.

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Home Loan EMI Calculator · Reducing balance · Sec 24(b) max ₹2L/yr · Sec 80C max ₹1.5L/yr · Old Regime only · Rates as of Apr 2026 · For informational purposes only