What is the Mortgage Calculator?
The Mortgage Calculator helps home buyers estimate their monthly mortgage payment, total repayment, and total interest for a home loan. It accounts for the down payment to calculate the exact loan amount, then applies the standard amortization formula to project costs across the full mortgage term.
How does it work?
Enter the home price, your down payment, the annual interest rate, and the loan term. The calculator subtracts the down payment from the home price to find the principal loan amount. It then applies the amortization formula to compute the monthly payment, total repayment, and total interest over the mortgage term.
Formula
M = P x r x (1+r)^n / ((1+r)^n - 1), where P = home price - down payment
How the calculation works
How the calculation works
- 1Subtract your down payment from the home price to get the loan principal: P = home price - down payment
- 2Convert the annual rate to a monthly rate: r = annual rate / 12 / 100
- 3Compute the number of monthly payments: n = years x 12
- 4Monthly mortgage M = P x r x (1 + r)^n / ((1 + r)^n - 1)
- 5Total payment = M x n, and total interest = total payment - P
Worked example
Worked Example
Arjun and Sneha are buying their first home in Hyderabad for Rs 30,00,000 with a Rs 6,00,000 down payment, at a 7% home loan rate for 30 years.
- 1Step 1: Loan principal P = 30,00,000 - 6,00,000 = Rs 24,00,000
- 2Step 2: Monthly rate r = 7 / 12 / 100 = 0.005833, and n = 30 x 12 = 360 months
- 3Step 3: (1.005833)^360 = 8.0886
- 4Step 4: Monthly mortgage = 2400000 x 0.005833 x 8.0886 / (8.0886 - 1) = Rs 15,967.26
- 5Step 5: Total payment = 15,967.26 x 360 = Rs 57,48,213.56, and total interest = 57,48,213.56 - 24,00,000 = Rs 33,48,213.56
Result
Arjun and Sneha's monthly mortgage is Rs 15,967.26. Over 30 years they repay Rs 57,48,213.56, of which Rs 33,48,213.56 is interest - more than the loan principal itself, which shows how much tenure matters.
Interpretation guide
How to read your result
Historically low home loan rates; interest forms a smaller share of the total
Consider locking in and choosing a shorter tenure to multiply the benefit of the low rate
The common band for Indian home loans in recent years
Model both 15-year and 30-year terms to see the trade-off between EMI and total interest
High borrowing costs that can push total interest past the property's price
Improve your credit score, increase the down payment, or compare housing finance companies before committing
Common mistakes
- - Not including property taxes, insurance, and maintenance in the total housing budget
- - Making the smallest down payment possible without considering the interest saved by a larger one
- - Choosing a mortgage term based only on monthly payment without considering total interest
Practical tips
Practical tips
A down payment of 20% or more avoids the need for additional insurance cover and shrinks the principal you pay interest on
Model a 15-year term even if you plan a 30-year mortgage - the interest saved is usually several lakhs of rupees
Budget for stamp duty, registration, GST on under-construction properties, and maintenance on top of the EMI
For floating-rate loans, stress-test your budget with a rate 1-2% higher than today's before signing
Check whether your lender offers a step-down facility or lets you prepay; early prepayment on home loans saves the most interest in the first third of the term
Remember that interest paid on home loans is deductible under Section 24(b) up to Rs 2,00,000 a year, subject to conditions
When should you use it?
- - Shopping for a home and evaluating different price ranges
- - Comparing mortgage offers from different banks and housing finance companies
- - Deciding how large a down payment to make
- - Choosing between a 15-year and 30-year mortgage term
Benefits
- - Shows the true long-term cost of a home purchase
- - Helps determine the minimum down payment needed for affordability
- - Enables comparison of different mortgage scenarios side by side
Step-by-step example
Start with the total price of the home you are considering. Subtract your down payment to find the amount you need to borrow. Enter the interest rate offered by your lender and choose a loan term typically 15, 20, or 30 years. The calculator shows your monthly obligation and the total cost of the mortgage.
Real-world example
A home priced at Rs 30,00,000 with a Rs 6,00,000 down payment leaves a loan principal of Rs 24,00,000. At 7% interest over 30 years, the monthly mortgage is Rs 15,966, the total payment is Rs 57,47,750, and the total interest is Rs 33,47,750.