PNB Home Loan EMI Calculator

Home Loan EMI Calculator PNB

PNB Home Loan EMI

• Home Loan EMI (or equated monthly instalment) is a fixed amount of money paid by you to PNB against the loan taken. This is towards repayment of your loan to the bank. Every month, it is due on a fixed day of the month till your loan is fully paid back.
• With PNB offering Home Loans with loan tenure upto 30 years, the loan EMI can be as low as Rs. 772 per lakh, to make it more affordable and convenient to meet your needs. Lowest Rate of interest offered by PNB on Home Loan is 8.55%.

• As you can see in the above table, for various loan amounts taken at the lowest rate of interest, EMI differs with changes to tenure at 15, 20 and 30 years. Your EMI is higher when you take loan for a shorter tenure of 15 years and it is lower when you apply for a higher tenure of 30 years.
• Your EMI consists of both interest payment and principal repayment. Though the EMI amount will remain constant, every month the proportion of interest payment and principal repaid within each EMI is different. With every EMI, the proportion of principal repayment in EMI keeps increasing and the interest component in EMI keeps reducing.

The above table shows the longer your loan tenure, lower is the EMI you pay on the loan. However, your total interest outgo is significantly higher in a long tenure loan. In the above example, if you take a Rs. 1,00,000 loan for a period of 30 years, you pay the lowest EMI of Rs. 772. However, you pay an interest of Rs. 177,920 on a Rs. 1,00,000 loan.
In contrast, if you take a Rs. 1,00,000 loan from PNB at the lowest loan rate offered for a period of 15 years, you pay a higher home loan EMI of Rs. 988 and pay an interest of only Rs. 77,840 which is less than half of what you paid in a 30 year loan. Hence, it is advisable to choose your loan tenure wisely as longer tenure means high interest expenses.

• Loan amount – This is the amount borrowed by a borrower from PNB. If you apply for a higher loan amount, your monthly EMI will be high. PNB gives minimum home loan of Rs. 500,000 upto an amount of Rs. 10,000,000.
• Interest rate - Interest rates is the rate charged by PNB on your home loan. Higher interest rate increases your housing loan EMI which will increase the total cost of the loan. Lowest interest rate offered by PNB is 8.55%. Do complete market research and compare rates online before you apply for a home loan.
• Loan tenure – This is the period in which you can repay your home loan in PNB. Longer loan tenure means lower housing loan EMI. Loan tenure can be determined by your age at the time of loan sanctioning and your retirement age. Generally, PNB offers house loan for a maximum tenure of 30 years.

PNB Home Loan EMI calculator formula

P*r* (1+r)^n/([(1+r)^n]-1)

Here is an illustration of how PNB Home Loan EMI is calculated:

In above formula,

P = Loan amount. This can range from Rs. 500,000 to Rs. 10,000,000

r = Rate of interest per month. Current rate is 8.55%, which is linked to PNB 1 Year MCLR, which is currently 8.35%. Last revised on 01st Aug 17

n = tenure in month. For PNB, this can be 360 months

Tips to decide the right amount of EMI

• Ascertain the amount you need to borrow: It is important that before approaching a bank for loan, you need to estimate the amount of loan you need to borrow. The amount of loan you need to borrow is a function of the value of the property and available funds with you. Remember house loan is a long term loan, and hence it is advisable to minimise your loan amount to the extent possible. Limit your loan amount to the balance funds you need to fund the property after accounting for your own available funds. Also, based on the EMI you can service, try to opt for lowest tenure of loans as long tenure loans result in huge interest outgo.
• Review your current obligations: Before, taking a loan it is advisable to do an evaluation of your current monthly expenses including any EMI obligations that you have on your current loans. The assessment will help you to estimate the amount of EMI you can pay comfortably after taking into account other obligations. Once you arrive at the EMI you can service, you can also decide on the right loan tenure.
• Calculate your PNB home loan eligibility: Your home loan eligibility is a function of value of the property and assessment of your repayment capacity based on your monthly income. PNB provides a LTV upto 80% and expects the borrower to fund the remaining value of property by own money. For example, at its lowest LTV 80%, PNB would expect its borrowers to provide margin money of 20%. In case this margin payment is higher than your available funds as estimated by you, you might need to look for higher LTV loans, which may carry higher interest rates and hence, will result in higher EMIs.
• PNB will also estimate your Fixed Income to Obligations Ratio to ascertain the maximum EMI you can service based on your current income and other monthly expenses. The bank applies a certain ratio to your income to estimate your monthly expenses and then adds your other EMI obligations to calculate your fixed obligations. The proportion of fixed income to your calculated fixed obligations gives your FOIR. PNB lends up to a maximum FOIR of 0.65. Based on the FOIR, the bank will also estimate the maximum amount of EMI you can service as a borrower. PNB's assessment may be different from your own assessment. Any differences in assessment may require you to readjust your loan amount requirement. You may also consider paying back other running short term loans to improve your eligibility.

Quick guide on PNB home loan

• Purpose of Loan: PNB home loan is taken to purchase, construct a home, renovate your existing home.
• Key Features
  • Loan available for both salaried and self employed. Special rates for women borrowers.
  • Borrowers within the age group of 21 and 60 years.
  • Security: Mortgage of property you are planning to purchase, renovate or construct.
  • Loan to Value Ratio upto 80%.
  • Loan Tenure 5 to 30 years.
  • Interest rates in the range of 8.55% to 8.65%.
  • Lowest EMI of Rs. 772 per lakh
• Processing Fees: 0.50% of loan amount, with a minimum of Rs. 20,000 and a maximum of Rs. 50,000
• Special schemes: PNB offers customised home loan interest rates and schemes for special category of borrowers including women borrowers, senior citizens, NRIs etc. Some of the special loan offers of PNB are:
  • Construction of House/Flat
  • Purchase of House/Flat
  • PNB Flexible Housing Loan
  • Unnati Home Loans

Will the PNB home loan EMI remain constant or change in future? What happens in case of increase or decrease in interest rate?

• Typically, the home loan EMI remains unchanged unless the customer requests for a change and the same is approved by PNB subject to its eligibility conditions (note that nominal charges may apply for effecting a customer initiated change in EMI)
• In case the floating rate of interest on your home loan increases, PNB will typically keep the EMI constant but increase the loan tenure. So, you will pay the same EMI but for a longer duration. In case the interest rates increase to an extent that the revised loan tenure is more than the maximum permissible by PNB, the bank may increase your EMI amount.
• For partly disbursed loans availed under tranched EMI scheme, your loan EMI will increase with each disbursement.

Will home loan EMI change in case of prepayment?

• PNB allows prepayment at nil charges or penalty in case of floating rate home loans.
• When you make a prepayment, the outstanding principal amount on your home loan reduces. In this case, you may choose to either keep the EMI the same and reduce the loan tenure (that is pay off the loan faster) or reduce the EMI and keep the loan tenure the same (that is pay lesser amount every month). It is beneficial to keep the EMI constant and reduce the loan tenure as you pay less interest to the bank in this option.

Why should I calculate PNB loan EMI before taking a loan?

It is advised to calculate home loan EMI prior to taking a home loan. There are several benefits of calculating your PNB housing loan EMI as discussed below -

• In case EMI comes out to be more than your monthly budget, then you have the chance to apply for a lower loan amount which fits your monthly budget and makes EMI easily affordable.
• If you already know the EMI you have to pay each month, then you can plan your spends accordingly
• Based on the EMI amount, you can opt for making prepayment of your home loan in future when you have surplus amount

Home Loan EMI of All Banks