Home Loan Rate of Interest Calculator

The Home Loan Interest Calculator is a valuable tool for estimating your loan costs. It helps you calculate your home loan’s monthly EMI and total interest payable.

By using this calculator, you can compare loan options, plan your budget, and make informed financial decisions. Make sure to use the calculator before finalizing your loan to avoid any surprises.!

Why Should You Stay Informed About Your Home Loan Interest Rate?

Staying informed about your interest rate is crucial for effective financial management. Here’s why:​

Factor	Impact
Monthly EMI	A higher interest rate raises your EMI, impacting your budget.
Total Loan Cost	A small change in interest rates can greatly affect your total loan cost.
Loan Tenure	Higher interest rates can extend your repayment period, adding to your financial burden.
Loan Eligibility	Affects loan approval and affordability based on credit score.
Market Trends & Inflation	Economic conditions influence interest rates, impacting borrowing costs and repayment strategies.

When Should You Opt for a Home Loan Balance Transfer

A home loan balance transfer allows you to shift your outstanding loan to another lender offering better terms. Consider switching when:

Condition	When to Transfer
Higher Interest Rate	Your current rate is higher than market trends.
Lower Offers Available	Another lender provides a better interest rate.
Better Loan Terms	Flexible tenure, lower fees, or improved service.
Improved Credit Score	You qualify for lower interest rates.
High EMI Burden	Need a more affordable repayment plan.

Case Study:

Scenario: Rahul took a home loan of ₹50 lakh at an interest rate of 9% for 20 years. After 5 years, he notices that new lenders offer lower interest rates.

Comparison: Staying vs. Transferring the Loan

Factor	Staying with Current Lender	Transferring to New Lender (8.10%)
Remaining Loan Tenure	15 years	15 years
Outstanding Loan Amount	₹44.23 lakh	₹44.23 lakh
EMI	₹44,986	₹42,524
Total Interest Paid (Remaining Tenure)	₹36.97 lakh	₹32.31 lakh
Savings	No savings	₹4.66 lakh (interest savings)

By transferring his loan to a lender offering 8.10%, Rahul saves nearly ₹4.66 lakh in interest payments while reducing his monthly EMI. This decision helps him lower his repayment burden and improve financial stability.

Benefits of Transferring Your Home Loan

Benefit	How It Helps
Lower Interest Rates	Reduces EMI and overall loan cost.
Lower EMI Burden	Makes repayments more affordable.
Better Loan Terms	Flexible tenure, lower fees, and better service.
Top-Up Loan Facility	Get additional funds for personal needs.
Improved Cash Flow	Frees up monthly budget for other expenses.
Leverage a Good Credit Score	Qualify for better rates with a strong credit profile.

Read More: How to Increase CIBIL Score

Fixed V/s Floating Home Loan Interest Rates

Aspects	Fixed Interest Rates	Floating Interest Rates
Rate Behavior	Constant throughout the loan tenure.	Changes based on market conditions.
Market Impact	Unaffected by rate fluctuations.	Directly impacted by market rates.
EMI Stability	Fixed EMIs, easy budgeting.	EMIs vary based on interest rates.
Total Loan Cost	Higher but predictable.	Can be lower if rates drop but riskier if they rise.
Prepayment	May have penalties.	Usually no penalties.
Best For	Stability seekers.	Risk-takers aiming for potential savings.

Tax Benefits on Home Loan Interest Payment

​In India, the Income Tax Act, 1961, provides several deductions on home loan interest payments under Section 24b to encourage homeownership. Here’s an overview of the key tax benefits available:​

Self-Occupied Property:

Deduction Limit: Up to ₹2 lakh per annum.​

Conditions:

• The loan must be for the purchase or construction of the property.
• Construction should be completed within five years from the end of the financial year in which the loan was taken; otherwise, the deductible limit reduced to ₹30,000 per annum.

Note: Interest paid during the pre-construction period can be claimed in five equal installments starting from the year the construction is completed or possession is taken. ​

Let-Out (Rented) Property:

Deduction Limit: The entire interest amount is deductible.​

Conditions:

• There is no upper limit on the deduction for interest paid. 
• However, the loss from house property that can be set off against other income heads is capped at ₹2 lakh per annum.
• Any excess loss can be carried forward for up to eight subsequent years.

Tax Benefits on Joint Home Loans

Interest Paid: Up to ₹2 lakh per annum for each co-borrower under Section 24(b).​

Conditions:

• Each co-borrower must be a co-owner of the property.​
• Each co-borrower must contribute to the loan repayment. ​

Suggested Read: Joint Home Loan Benefits

Home Loan Balance Transfer Rates by RBI Approved Top Banks

RBI Approved Top Banks	Balance Transfer Interest Rates	Processing Fees
Bank of Baroda	8.40% p.a. onwards	Up to 0.50% (Min. Rs.8,500; Max. Rs.25,000)
State Bank of India	8.25% p.a. onwards	8.50% p.a. onwards
Axis Bank Ltd.	8.75% p.a. onwards	Up to 1% of the loan amount or ₹10,000 (whichever is higher) + GST (as applicable)
HDFC Bank Ltd.	8.70% p.a. onwards	Upto 1.50% of the Loan amount or Rs. 5000/- whichever is higher + applicable taxes
ICICI Bank Ltd.	8.75% p.a. onwards	0.50% of the loan amount
IDFC FIRST Bank Limited	8.85% p.a. onwards	Up to 3% of loan amount
Kotak Mahindra Bank Ltd.	8.75% p.a. onwards (For Salaried) 8.80% p.a. onwards (For Self-Employed)	0.5% for salaried and 1% for self-employed

How to Reduce Your Home Loan Interest Rate?

A lower home loan interest rate means reduced EMIs and significant savings. Here are some ways to secure a better rate:

• Improve Your Credit Score – A high score (750+) increases your chances of getting a lower interest rate.
  
• Choose a Manageable Loan Amount – Borrow only what you can comfortably repay to avoid financial strain.
  
• Apply with a Co-Applicant – Adding a financially strong co-applicant can enhance loan eligibility and secure better terms.
  
• Opt for a Balance Transfer – If your current rate is high, switching to another lender with lower rates can save money.
  
• Use a Home Loan Interest Calculator – Compare different loan offers and check potential savings before finalizing your lender.

Conclusion

Using the Home Loan Interest Calculator is a smart way to plan your home loan. It gives you a clear idea of your monthly payments and the total interest you will pay. With this tool, you can make informed decisions and choose the loan terms that best suit your needs.

Ready to take the next step in your home loan journey? Visit Credit Dharma now to explore personalized loan options and expert guidance. Our team can help you navigate the complexities of home loans, compare rates from multiple lenders, and find the best deal for your dream home.

Frequently Asked Questions