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Mortgage Calculator

Estimate your monthly mortgage repayment, loan principal, and total interest over time.

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Total purchase price of the property

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Upfront payment percentage

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Fixed annual mortgage rate

Repayment period in years

Results

Monthly Mortgage Payment
₹34,713
Loan Amount (Principal)₹40,00,000
Down Payment Amount₹10,00,000
Total Interest₹43,31,103
Total Mortgage Repayment₹83,31,103

Assumes fixed interest rate with standard monthly reducing-balance amortization.

How mortgage calculations work

A mortgage is an amortizing loan secured by real property. Repayments follow the reducing-balance (French amortization) methodology, where each fixed periodic installment covers that month's accrued interest with the residual balance paying down loan principal:

1. Net Principal Borrowed: P = Home Purchase Price − Upfront Down Payment

2. Periodic Monthly Rate: r = Annual Interest Rate (%) ÷ 12 ÷ 100

3. Total Repayment Periods: n = Loan Term (Years) × 12

4. Monthly Payment (EMI): M = [ P × r × (1 + r)n ] ÷ [ (1 + r)n − 1 ]

5. Total Loan Interest: Total Interest = (M × n) − P

6. Total Property Outlay: Total Cash Outflow = Down Payment + (M × n)

Step-by-Step Worked Example (Default Scenario)

Consider a property purchased for ₹50,00,000 with a 20% down payment (₹10,00,000) funded upfront, leaving a net loan balance of ₹40,00,000 borrowed at an annual fixed rate of 8.50% over 20 years (240 months):

Milestone / ComponentMathematical CalculationComputed OutputStrategic Impact
Home Purchase PriceAgreed Contract Price₹50,00,000Total gross real estate transaction value.
Upfront Down Payment (20%)₹50,00,000 × 20%₹10,00,000Instant equity buffer; eliminates private mortgage insurance (PMI) mandates.
Net Principal Borrowed (P)₹50,00,000 − ₹10,00,000₹40,00,000Total bank debt disbursed and amortized.
Monthly Mortgage Payment (EMI)Amortization Formula (n=240, r=0.70833%)₹34,713 / MonthFixed monthly payment due every 30 days for 20 continuous years.
Month 1 BreakdownInterest: ₹40L × 0.70833% = ₹28,333
Principal: ₹34,713 − ₹28,333 = ₹6,380		81.6% Interest / 18.4% PrincipalNotice that early installments almost exclusively service interest overhead.
Total Principal RepaidOriginal Principal₹40,00,000 (48.0%)Retires the entirety of debt obligation.
Total Interest Paid to Bank(₹34,713 × 240) − ₹40,00,000₹43,31,103 (52.0%)Financing cost exceeds the entire original borrowed principal!
Total Real Estate Outlay₹10,00,000 (Down) + ₹83,31,103 (Debt)₹93,31,1031.87× the original property purchase price.

Loan Term Trade-off: 15 vs 20 vs 30 Years

On the same ₹40,00,000 loan at 8.50% interest, choosing loan tenure changes the total financing burden radically:

  • 15-Year Term: EMI is ₹39,403 (+₹4,690/mo), but total interest drops to ₹30,92,492 — saving ₹12,38,611 in interest and retiring debt 5 years earlier.
  • 20-Year Term (Default): Balanced EMI of ₹34,713 with total interest of ₹43,31,103.
  • 30-Year Term: EMI falls to ₹30,757 (saving ₹3,956/mo), but total interest explodes to ₹70,72,374 — costing an extra ₹27,41,271 in pure bank interest!

The Equity "Crossover Point"

Because of reducing-balance mechanics, your monthly payments shift from interest-heavy to principal-heavy over time:

  • Years 1–5: Over 75% of your cumulative payments go toward interest. Home equity grows very slowly.
  • The Crossover Point: At Month 137 (~Year 11.5), the interest portion falls below 50% for the first time.
  • Prepayment Acceleration: Adding just 1 extra EMI payment per year directly to principal shortens a 20-year mortgage by nearly 3.5 years and saves over ₹7.5 Lakhs in interest.

Assumptions & Real-World Exclusions

  • PITI vs Principal & Interest: This calculator models pure Principal & Interest (PI). Full housing outlays (PITI) also include municipal property taxes, homeowner's insurance, and private mortgage insurance (PMI).
  • Floating vs Fixed Rates: Most residential mortgages are floating-rate (repo-linked in India, or adjustable-rate ARM in the US). If central bank benchmark rates rise by 100 bps, your tenure or EMI will automatically increase.
  • Closing & Acquisition Costs: Stamp duty, registration charges, legal title vetting, and loan origination fees (typically 4% to 8% of property value) must be funded out-of-pocket and are not included in the loan balance.
How much mortgage debt will lenders approve based on your income?Read our underwriting guide on Debt-to-Income (DTI) Ratio for Mortgage Approval: Front-End vs. Back-End Limits to calculate your maximum borrowing capacity and debt capacity ceiling.

Frequently asked questions

What factors determine my monthly mortgage payment?
Your monthly mortgage payment depends on loan principal (home purchase price minus down payment), annual interest rate, and loan term duration. It may also include property taxes and home insurance.
How does down payment size impact my mortgage?
A larger down payment lowers the total principal borrowed, reduces your monthly payment, decreases the total interest paid over the life of the loan, and frequently eliminates private mortgage insurance (PMI).
What is the difference between a 15-year and 30-year mortgage?
A 15-year mortgage has higher monthly payments but allows you to build equity twice as fast and pay substantially less total interest over the life of the loan compared to a 30-year mortgage.
How does amortization work in a mortgage?
Under reducing-balance amortization, early mortgage payments consist predominantly of interest. As the loan principal balance steadily declines, a greater proportion of each payment goes toward paying down principal.
Can extra principal prepayments shorten my mortgage?
Yes. Making regular additional principal prepayments directly reduces the outstanding balance, dramatically reducing future compound interest and shortening the loan payoff period by years.

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Monthly Mortgage Payment

₹34,713