₹1 Cr Home Loan? You Pay ₹1 Cr Extra in Interest

A ₹1 crore home loan at typical rates can cost another ₹1 crore just in interest over 20 years. But small steps — like prepaying principal early or shortening tenure — can save you lakhs. Here's exactly what to do.

Here's what happened: A ₹1 crore home loan at ~8.75% over 20 years generates roughly ₹1.09 crore in interest, nearly doubling your actual borrowing cost by the final EMI.. Reducing loan tenure — even by 3–5 years — can cut total interest outgo by ₹25–₹40 lakh, though it raises the monthly EMI slightly.. Making lump-sum prepayments in the early years of a loan is far more effective than prepaying later, because interest is front-loaded in an amortisation schedule..

What you should do: Calculate your total repayment (EMI × months), not just your EMI, using your loan statement or a free amortisation calculator — the number will shock you into action.. Request your lender to shorten your tenure every time you receive a salary hike or bonus, or after any RBI repo rate cut that reduces your outstanding principal.. Prepay at least one extra EMI worth of principal every year — even ₹8,000–₹10,000/month extra against principal can cut a 20-year loan down by 4–5 years..

When your floating-rate home loan resets lower after a repo cut, always ask your bank to reduce tenure instead of EMI — you save lakhs without spending a rupee more each month.