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Which prepayment saves you most?

Close your home loan years early

  • Step-up EMI, extra EMIs, lumpsum or refinance
  • Interest saved by each
  • Years cut from the loan
Interest you save
₹23.27 L
and you're debt-free 8 yrs 11 mo sooner, in 2037 instead of 2046
  • Interest you still pay₹30.87 L57%
  • Interest you save₹23.27 L43%

When you'll be debt-free

  • Regular loanNo prepaymentDebt-free 2046
  • Step up EMI yearlyEMI +5% every year7 yrs 9 mo sooner · saves ₹19.52 L
  • Extra EMIs each year1 extra EMI a year3 yrs 3 mo sooner · saves ₹10.29 L
  • All combinedEverything switched on8 yrs 11 mo sooner · saves ₹23.27 L

Your inputs

₹
₹1 L₹5 Cr
%
5%16%
yrs
3y30y
Ways to pay it off faster
%
1%20%
16
Your taxOptional: old regime counts 24(b) and 80C on the loan
Tax regime
Your tax slab
₹
₹0₹1.5 L

Up to ₹2L of interest a year (Section 24(b)) and the principal you repay, within what is left of ₹1.5L (80C), come off your tax.

Switch on to see what future amounts will buy at today's prices.

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What this means

  • Step up EMI yearly saves the most on its own: ₹19.52 L.
    Why?

    Together they save ₹23.27 L, less than the ₹29.81 L they add up to, because each one shrinks the loan the others work on.

  • One extra EMI a year (8% more) ends the loan 3 yrs 3 mo sooner.
    Why?

    Every rupee of an extra EMI goes straight to the loan, so there is less left for interest to be charged on.

  • EMI grows from ₹43,391 to ₹77,924 by 2039.
    Why?

    Comfortable if your pay rises faster than 5% a year.

  • New regime: no tax break on the loan, so every rupee of interest saved is saved in full.
    Why?

    Under the old regime, 24(b) and 80C refund part of the interest and principal, so prepaying saves a little less. Switch to Old to see it.

More details

Your EMI, year by year

How your loan shrinks

Loan left

Loan leftWithout prepayingCut from loanInterest to bank

Paid each year

Tax breaks on your loan, year 1

  • Section 24(b) interest, ₹2L a year cap₹0 deducted · saves ₹0
  • Section 80C principal, ₹1.5L cap with your other 80C₹0 deducted · saves ₹0

New regime: no deduction, so the loan costs its full 8.5%. Switch to Old to see the saving.

Next stepPrepay at all, or invest the money instead?Your net worth both ways on this ₹50 L loan, after tax.

How it's calculated

The loan runs month by month. Each month, interest is charged on the remaining balance and the rest of the EMI reduces it.

  • Step-up: the EMI rises by your chosen % at the start of every loan year.
  • Extra EMIs: paid straight to principal at the end of each year, so the tenure shrinks.
  • Lumpsum: paid at the end of the chosen year.
  • Refinance: the remaining balance moves to the new rate after the chosen year. Switching fees are subtracted from your savings.

After a lumpsum or refinance, reduce tenure keeps your EMI and ends the loan sooner. Reduce EMI re-calculates the EMI so the loan still ends on the original date.

Prepaying cuts interest and with it the 24(b) refund, so the tax breaks are shown with and without your plan.

Home-loan tax breaks (old regime only). The refund is the deduction times your slab rate. The new regime allows no deduction on a self-occupied home.

24(b) saving = min(interest, ₹2,00,000) × slab
80C saving = min(principal, ₹1,50,000 − other 80C) × slab
Cost of the loan = rate × (1 − 24(b) saved ÷ interest paid)

Tax figures follow Budget 2025 rules, for FY 2025-26 onward.

Common questions

Should I reduce tenure or EMI after prepaying?
Reducing tenure saves far more interest, because the balance stays low for longer. Reducing EMI frees cash every month. If your income is steady and you have an emergency fund, reduce tenure.
How much does one extra EMI a year save?
On a 20-year loan at around 8.5%, one extra EMI a year typically cuts the tenure by 3 to 4 years and saves a large share of the interest. Try it with your numbers above.
Is refinancing my home loan worth it?
It usually pays when the rate gap is 0.5% or more and plenty of tenure is left. Add processing, legal and valuation fees before deciding, and ask your current bank to reprice first.
Do banks charge for prepaying a home loan?
RBI rules bar prepayment penalties on floating-rate home loans for individual borrowers. Fixed-rate loans may carry charges, so check your agreement.
Is it better to prepay early or late in the loan?
Early. Interest is charged on the outstanding balance, which is highest in the first years, so every rupee prepaid early saves more interest than the same rupee later.
How much home-loan tax can I save?
Under the old regime, up to ₹2 lakh of interest a year (Section 24(b)) plus the principal you repay within what is left of ₹1.5 lakh (Section 80C). At the 30% slab that is up to ₹60,000 plus ₹45,000 a year. The new regime allows neither on a self-occupied home.
Why does the calculator ask what I already use under 80C?
The ₹1.5 lakh limit is shared with EPF, PPF, ELSS, life-insurance premiums and tuition fees. Your loan principal only gets what is left, and for many salaried people EPF alone uses most of it.
Does the ₹2 lakh limit apply to joint loans?
It applies to each person. Co-owners who are also co-borrowers each claim up to ₹2 lakh of interest and ₹1.5 lakh under 80C, in proportion to their share of the loan. Enter only your own share here.
What if the home is let out or still being built?
For a let-out home the interest has no cap, but setting a loss against your other income stops at ₹2 lakh a year. Interest paid before you get possession is claimed in 5 equal parts from the year the home is finished, inside the same cap. If a self-occupied home isn't finished within 5 years of the loan, the cap falls to ₹30,000. This calculator models a finished, self-occupied home.
Can I claim stamp duty, and what if I sell early?
Stamp duty and registration count under 80C in the year you pay them, which this calculator does not add. Selling the home within 5 years of getting possession adds the 80C you claimed back to your income.
What about the extra 80EE and 80EEA deductions?
They ended for loans sanctioned after 31 March 2022, so they are not modelled.
How exact is the tax saving?
It is a close estimate: the deduction times your slab rate. Cess (4%) would add a little, and a large deduction can pull you into a lower slab. The Income-tax Act 2025 (from 1 April 2026) renumbers these sections, but the limits stay as above.

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