A ₹50 lakh loan is the most common metro home loan, and at 8.5% over 20 years it costs ₹43,391 a month. The total interest of ₹54,13,879 actually exceeds the ₹50 lakh you borrowed.
At this size the interest rate matters enormously. Each half-percent moves the EMI by over a thousand rupees a month: at 8% the EMI is ₹41,822, at 9% it is ₹44,986, and at 9.5% it climbs to ₹46,607. Over 20 years that 1.5-point spread changes your total interest from ₹50.37 L to ₹61.86 L. Shopping the rate, and refinancing when the benchmark falls, is worth real money on a loan this size. A ₹43,391 EMI implies net income near ₹1,08,478 a month.
| Loan amount | ₹50,00,000 |
| EMI at 8.5% / 20 yrs | ₹43,391 |
| At 8.0% | ₹41,822 |
| At 9.0% | ₹44,986 |
| Total interest (8.5%) | ₹54,13,879 |
| Total amount repaid | ₹1,04,13,879 |
Your EMI is fixed by the formula EMI = P × r × (1+r)n ÷ [(1+r)n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly instalments. Each EMI is split between interest and principal repayment: the early years are mostly interest, the later years mostly principal. A longer tenure lowers the EMI but raises the total interest you pay, because the principal is outstanding for longer.