'Interest'ing facts about home loan

Given the recent talks about reduction in interest rates by banks, reduction in inflation, weakening of global interest rates etc, i thought it is important to share with you some of the interesting facts about the rate of interest and the EMI that one pays over the tenure of the loan and the total amount that one ends up paying as a percentage of the total amount borrowed.

If the rate of interest rate for the home loan is taken as 10% pa then the EMI (Equated Monthly Installment) per month will be as given below

5 years - 2125. Total Amount repaid during the tenure of the loan - 129120
10 years - 1322. Total Amount repaid during the tenure of the loan - 158640
15 years - 1075. Total Amount repaid during the tenure of the loan - 193500
20 years - 966. Total Amount repaid during the tenure of the loan - 231840
25 years - 909. Total Amount repaid during the tenure of the loan - 272700

From the above, it is quite clear that as the number of years increase the EMI decreases but also on a very important note, the total EMI paid increases significantly. If one takes a 15 or 20 year period, one ends up paying almost twice the actual amount borrowed to the bank.

If the rate of interest rate is taken as 12% pa then the EMI per month will be as given below and if one takes a 15 or 20 year period, one ends up paying almost 2.5 times the actual amount borrowed to the bank.

5 years - 2225. Total Amount repaid during the tenure of the loan - 133500
10 years - 1435. Total Amount repaid during the tenure of the loan - 172200
15 years - 1201. Total Amount repaid during the tenure of the loan - 216180
20 years - 1102. Total Amount repaid during the tenure of the loan - 264480
25 years - 1054. Total Amount repaid during the tenure of the loan - 316200

Thus in future if you get a small bonus or some extra income, focus on paying back some of the loan as your tenure will reduce which will have a magical impact on the total tenure of the loan.