How do I calculate home loan EMI step by step?

Short answer
Home loan EMI is calculated using a fixed formula based on loan amount, interest rate, and tenure. Here’s the step-by-step method with an Indian example.

Step 1: Note the 3 inputs

Loan amount (P): ₹50,00,000
Interest rate (annual): 9% p.a.
Tenure: 20 years

Step 2: Convert annual interest to a monthly rate

Annual rate = 9%
Monthly rate (r) = 9 / 12 / 100
r = 0.0075

Step 3: Convert tenure to total months

20 years = 20 × 12 = 240 months
n = 240

Step 4: Use the EMI formula

EMI = P × r × (1 + r)^n / [(1 + r)^n − 1]

Plug in values:
EMI = 50,00,000 × 0.0075 × (1.0075)^240 / [(1.0075)^240 − 1]

Step 5: Calculate (approx)

(1.0075)^240 ≈ 6.02 (approx value)

Now:
EMI ≈ 50,00,000 × 0.0075 × 6.02 / (6.02 − 1)
EMI ≈ 50,00,000 × 0.04515 / 5.02
EMI ≈ 50,00,000 × 0.00899
EMI ≈ ₹44,950 per month (approx)

Step 6: Quick sanity check

Total paid over 240 months ≈ 44,950 × 240 ≈ ₹1.08 crore
Interest is the reason total goes much higher than ₹50 lakh. Starting years mein interest portion zyada hota hai.

Final takeaway

To calculate EMI step by step: convert rate to monthly, tenure to months, apply the formula. If you share your loan amount, rate, and tenure, I can calculate your exact EMI too.