Enter your outstanding home loan, rate and remaining tenure, plus what you can prepay. The calculator compares keeping the EMI (shorter loan) with keeping the tenure (lower EMI) and shows the interest you save in each case.
When you make a part-prepayment, your bank usually asks whether to keep the EMI and shorten the loan, or keep the end date and cut the EMI. Keeping the EMI saves far more interest, because the whole EMI keeps attacking a smaller balance. On a ₹40 lakh loan at 8.5% with 20 years left, a single ₹5 lakh prepayment saves about ₹16.7 lakh of interest and closes the loan about 5 years early if you keep the ₹34,713 EMI. Choosing a lower EMI (₹30,374) instead saves only about ₹5.4 lakh.
Lowering the EMI still makes sense if your monthly budget is tight or you expect income to fall. You can also mix the two: lower the EMI now and keep making yearly prepayments, which the calculator models with the "extra every year" box.
Interest is front-loaded: in the early years most of each EMI is interest. So prepayments in the first third of the loan save the most. Under RBI rules, banks and housing finance companies cannot charge prepayment or foreclosure penalties on floating-rate home loans taken by individuals, so you can prepay any amount. Compare the after-tax cost before prepaying: in the old tax regime, interest on a self-occupied home is deductible up to ₹2 lakh a year, which slightly reduces the benefit; in the new regime there is no such deduction.
Estimates assume a constant interest rate. Floating rates change, and your bank may round EMIs differently.
Last reviewed: 6 November 2026 by the YogiCalc team · How we calculate and verify · Spotted an error? Tell us
Reducing tenure saves much more interest because the EMI stays the same while the balance is smaller. Reduce the EMI only if you need the monthly cash flow.
Not on floating-rate home loans to individuals: RBI rules bar banks and housing finance companies from charging foreclosure or part-prepayment penalties on them. Fixed-rate loans may carry a charge, so check your agreement.
At 8.5% with 20 years left, about ₹16.7 lakh of interest if you keep the EMI (the loan ends about 5 years early), or about ₹5.4 lakh if you lower the EMI instead.
As early as possible. Interest makes up most of each EMI in the early years, so every rupee prepaid then saves more interest than the same rupee later.
Prepaying gives a risk-free saving equal to your loan’s interest rate (on a floating-rate loan, that changes when the rate resets). If you expect investments to earn clearly more after tax, and you are comfortable with risk, investing can win; many people split the money between both.