How a home loan is repaid
A home loan is repaid in equal monthly instalments over a long tenure — often 15 to 30 years. Because the tenure is long, the total interest can rival or exceed the amount borrowed. In the early years almost all of your EMI is interest; the principal only starts falling meaningfully later, which is why early prepayments are so powerful.
Floating vs fixed rate
Most Indian home loans are floating-rate, linked to an external benchmark such as the RBI repo rate. When the benchmark moves, your lender usually keeps the EMI the same and adjusts the tenure, or vice versa. Floating-rate home loans carry no prepayment or foreclosure penalty for individual borrowers, so you can repay early without extra cost.
Tax benefits
Under the old tax regime, home loan interest is deductible up to ₹2 lakh a year under Section 24(b) for a self-occupied home, and principal repayment up to ₹1.5 lakh under Section 80C. These benefits are largely unavailable under the new regime, so factor your regime choice into the real cost of the loan.