Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs

SUPPORT

Menu  
 
Apply Now
Apply Now

Tata Capital > Blog > Loan for Home > How does Interest Rate Impact your Home Loan EMIs and Total Cost?

Loan for Home

How does Interest Rate Impact your Home Loan EMIs and Total Cost?

How does Interest Rate Impact your Home Loan EMIs and Total Cost?

Everyone knows that loans are about interest rates. Lower rates are good for borrowers and higher rates are good for lenders. Plain and simple.

But borrowing in general should be avoided unless it’s necessary. Atleast in case of real estate, it can be said that its unavoidable as the cost of properties is extremely high these days.

At times, people make the mistake of underestimating the impact of lower home loan interest rates. If their existing bank is offering them 10.5% and a new lender is giving 10% rate, they will still stick with higher priced bank. They believe that a difference of 0.5% doesn’t amount to much. But they are mistaken.

Additional Read: Factors That Impact Home Loan Interest Rates

How? Let us explain it to you with some basic mathematics.

Suppose you need to take a housing loan of Rs 50 lac for 15 years. What is the impact of change in interest rate on EMIs?

Here it is:

At 9.0%, the monthly EMI is Rs 50,713 (Total Interest – Rs 41 lacs)
At 9.5%, the monthly EMI is Rs 52,211 (Total Interest – Rs 44 lacs)
At 10.0%, the monthly EMI is Rs 53,730 (Total Interest – Rs 47 lacs)
At 10.5%, the monthly EMI is Rs 55,270 (Total Interest – Rs 49 lacs)
At 11.0%, the monthly EMI is Rs 56,830 (Total Interest – Rs 52 lacs)

As you can see, higher the rate of interest is, higher will be the monthly EMI. Also, the difference in total interest outgo during the 15-year tenure is several lacs for each 0.5% change in borrowing rates.

Opting for longer tenure too can reduce your home loan EMIs. But that will cost you more in terms of total interest being paid. So the key to lower EMIs is lower interest rate.

Additional Read: Simple Tips On How To Reduce Home Loan EMIs

Therefore, remember that whenever you are planning to take a home loan, do shop around a bit to see what is on offer. You can really save several lacs if you can even get your borrowing rates reduced by a small percentage.

Apply Housing Loan Online

Say Hello to Your New Home with Our Easy Home Loans!

Apply now
Popular Searches
anyror modt charges 712 utara online gujarat pre emi calculator earnest money deposit Goa Land Record earnest money khasra number meebhoomi Assam Land Record
More About Loans
home loan calculating home loan housing loan rate of interest calculate home loan eligibility documents needed for housing loan quick cash loan housing loan top up home loan transfer home loan with overdraft facility home loan balance transfer calculator home loan disbursement process loan for home extension rgrhcl
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools