Advanced Home Loan Calculator
EMI with offset account and extra prepayments.
Inputs
This calculator is for general information only and isn't financial advice. Rates, tax rules, and your actual eligibility depend on your specific situation — check with your bank or a qualified advisor before acting on it.
Formula
Interest = (Balance − Offset) × r; Principal reduction = EMI − Interest + Extra
The scheduled EMI is computed on the full loan amount using the standard amortising formula. Each month, interest accrues only on the outstanding balance minus any offset savings parked with the lender. Extra monthly payments go directly toward principal on top of the EMI, shortening tenure and compounding interest savings over time.
Worked example
A ₹50 lakh home loan at 8.5% over 20 years normally costs about ₹54 lakh in interest. Parking ₹5 lakh in an offset account and paying ₹10,000 extra each month can shave several years off the loan and save lakhs in interest — the offset reduces the interest-bearing balance every month, while the extra payment attacks principal directly.
Where this can give the wrong answer
- Offset balance cannot exceed the outstanding loan — the calculator caps interest savings at the point where balance minus offset reaches zero.
- If extra payment plus EMI principal portion exceeds the remaining balance, the loan closes early in the simulation; months saved are reported against the original tenure.
- Floating-rate loans that reset after each RBI cycle aren't modelled — re-run with the revised rate when your bank adjusts the spread.
FAQ
- A prepayment permanently reduces principal. An offset keeps your savings liquid while the bank treats them as reducing the loan balance for interest calculation only. You can withdraw offset funds, but doing so raises interest again.