Owning a house is not as difficult as it used to be, given the number of home loans offered by financial institutions at competitive interest rates and flexible tenure. The most important thing is to calculate the home loan interest rate before applying for the home loan. The lucrative interest rates reduce the EMI to a great extent. However, the most difficult part of applying for a loan is figuring out the EMI which an applicant is comfortable paying. Lenders have thus come up with an online home loan interest rate calculator which calculates the EMI accurately in no time.

EMI calculation:

Generally, the EMI is calculated on a fixed rate. But some lenders offer a floating interest rate that fluctuates based on the prevailing market conditions. This consequently affects the EMI. EMI calculation depends on the loan tenure, rate of interest and the loan amount. EMI is proportional to the loan amount and interest rate; and inversely proportional to the tenure. Mathematically, this can be seen with the following formula:

This is a universal EMI formula that is used to calculate the EMI of every loan; not just home loan. Calculating the EMI for each and every parameter is a tedious task where the customer needs to be alert and dedicate several hours for accurate calculation. EMI can also be calculated using the excel sheets with its pre-set formulas. But this is again a meticulous task which is comparatively easy. 

Interest rate calculator

The home loan calculator provides an easy solution to this problem. Not only is an online EMI calculator easy to use but displays results within a second. An online interest calculator aids in assessing the equated monthly installment that needs to be paid every month until the repayment of the loan amount along with its interest. 

Key features of home interest calculator

Here are some features of the interest calculator which makes it a popular option among customers:-

1. A home loan interest rate calculator is user-friendly that is free of mathematical jargons. It helps the user to get an estimate of the EMI instantly. 

2. These calculators are available on every lender’s website. 

3. It also helps in calculating the loan eligibility. It lets the borrower know how much money they can apply for as their loan amount. 

4. All the information that needs to be entered can be easily found in the loan agreement details. 

5. It only requires basic details like the loan amount, interest rate, and the tenure to display the results. However, certain EMI calculator offers an in-depth result if the user provides other details like the property value.  

6. Advanced interest rate calculators also consider taxes, the borrower’s running loan EMI if any, and state/ local taxes.

7. It also shows the amortization schedule including the EMI with a break-up of the principal amount paid out, in addition to the attached interest. Moreover, the amortization schedule indicates the outstanding balance after paying the EMI every month.

8. Borrowers can use the online interest rate calculator to simplify the financial data and get results straight away.

9. The calculator is free of cost and can be used for as many times and the user pleases.

Steps to use the calculator

Users need to go to the desired lender’s portal and click on the EMI calculator option. The home loan amount, interest rate, and tenure need to be entered manually or the user can merely drag the pointers until the desired value of gain. It is true that home loan calculator made calculations easy. Some calculators are in-built with both these functions. Users need to enter the tenure in months or years as instructed. The result will then be displayed on the screen instantly. The result shows the monthly payment (EMI), total interest payable, and the total of payments (principal + interest). Also, the home loan breakup will also be displayed in the form of a pie chart and graph to assist the users further. An amortization table will also be displayed with shows the number of years the user’s need to pay the EMI along with each of its interests, payable amount, and balance (outstanding).

Users can then change the values of the parameters or enter a different set of values until the desired result is achieved.