Home Loan Prepayment Calculator
See exactly how much interest a lump-sum or monthly prepayment saves on your home loan, and how many years it cuts from your tenure.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →Prepayment is the highest-certainty return available to most Indian households. Paying down an 8.5% home loan is a guaranteed, tax-free 8.5% — better than a fixed deposit after tax, and without market risk.
The timing matters enormously. Because interest is charged on the outstanding balance, a rupee prepaid in year 2 kills far more interest than the same rupee in year 15. This calculator shows the saving for your loan and your timing.
How prepayment works
A prepayment goes straight against principal. Because every future month's interest is charged on a smaller balance, the saving compounds for the rest of the loan — which is why the headline saving is usually several times the amount you prepaid.
You then choose what to do with the benefit. Reduce the tenure and your EMI stays the same but the loan finishes years earlier — this saves the most. Reduce the EMI and your monthly outgo falls but you keep paying for the original term. Lenders often default to reducing the EMI; ask in writing for tenure reduction if that is what you want.
A worked example
₹50 lakh at 8.5% for 20 years, ₹5 lakh prepaid after 2 years. The outstanding balance is about ₹47.9 lakh. Prepaying ₹5 lakh cuts roughly ₹14.6 lakh of interest and takes about 3 years 9 months off the loan. The same ₹5 lakh prepaid in year 15 saves closer to ₹2 lakh.
Rules worth knowing
- Floating-rate home loans to individuals carry no prepayment penalty — the RBI prohibits it. Fixed-rate loans and loans to companies can still be charged.
- Prepay early in the month, right after the EMI debits, so you are not charged a full month's interest on money you have already paid.
- Get a revised amortisation schedule in writing after every prepayment.
- If you claim Section 80C on principal, a very large prepayment can waste part of that year's ₹1.5 lakh limit — worth splitting across two financial years.
Turn a calculation into an enquiry
Buyers who run these numbers are ready to talk. Give every listing its own page with your photo, phone and WhatsApp on it — leads land straight on your phone.
Create your free property pageFrequently asked questions
Is there a penalty for prepaying a home loan in India?
Not on floating-rate home loans taken by individuals — the RBI bars foreclosure and prepayment charges on them. Fixed-rate loans may carry 2–4%, and loans in a company name are not protected.
Should I reduce the EMI or the tenure?
Reduce the tenure. Keeping the EMI and shortening the loan saves far more interest. Reducing the EMI only helps if your monthly cash flow is genuinely tight.
Is prepaying better than investing the money?
Prepaying is a risk-free, tax-free return equal to your loan rate. To beat 8.5% after tax, an equity investment needs roughly 11–12% pre-tax consistently. Many people do both: prepay a fixed amount yearly and invest the rest.
When is the best time to prepay?
As early as possible. In the first third of the loan most of each EMI is interest, so prepayments there remove the most future interest. After roughly the two-thirds mark the benefit shrinks sharply.
Do I lose tax benefits by prepaying?
You lose future deductions on the interest you no longer pay — but you are saving that interest outright, which is the larger number. The deduction was only ever a partial rebate on a real cost.