Home Loan Prepayment & Interest Saver Calculator

Formula & Calculation Methodology

Recalculates reducing principal balance amortisation schedule with additional monthly cash flows to determine months saved.

	ext{Balance}_{m} = 	ext{Balance}_{m-1} 	imes (1 + r) - (	ext{EMI} + 	ext{Extra})

Step-by-Step Worked Example

Principal: ₹50,00,000 (50 Lakhs) | Rate: 8.5% p.a. | Original Tenure: 20 Years | Extra Monthly: ₹5,000

1. Original Monthly EMI = ₹43,391 | Total Original Interest = ₹54,13,879
2. New Monthly Payment with Prepayment = ₹48,391
3. Revised Tenure with Extra Payment = ~15.2 Years (Saved 4.8 Years / 58 Months)
4. Revised Total Interest = ₹38,72,140
5. Total Direct Interest Saved = ₹15,41,739

Why Home Loan Prepayment is the Smartest Financial Move

In the early years of a home loan, up to 70% of your EMI goes toward bank interest rather than principal reduction.

Making small, regular prepayments directly reduces the principal balance, creating a massive compounding interest savings effect.

Frequently Asked Questions