Effective Interest Rate

Effective interest rate of 2.63% post PMAY & Tax Benefit

Illustration –

House Value(A) – Rs 35,00,000
Home Loan amount (B) – Rs 24,00,000/- ( 70% of the Value)
PMAY Subsidy (C) – Rs 2,30,167/-
Net Loan Amount (B-C) – Rs 21,69,844/-*

YearsOpening Loan PrincipalInterest PaymentPrincipal Repayment
(Prepayment of Rs 1,50,000/- p.a. to maximize tax benefit)
Tax Saved**Net Amount Paid (Net of Tax Saving)
121,69,8441,82,7801,50,0001,02,8292,29,951
220,19,8441,69,5211,50,00098,7322,20,789
318,69,8441,56,2631,50,00094,6342,11,628
417,19,8441,42,0041,50,00090,5382,02,466
515,69,8441,29,7461,50,00086,4411,93,304
614,19,8441,16,4871,50,00082,3441,82,142
712,69,8441,03,2281,50,00078,2481,74,981
811,19,84489,9701,50,00074,1511,65,819
99,69,84476,7111,50,00070,0541,56,657
108,19,84463,4521,62,51365,9571,60,008
116,57,33249,0881,76,87761,5181,64,447
124,80,45533,4531,92,51256,6871,69,278
132,87,94316,437209,52851,4291,74,536
1478,4151,47478,41524,68655,203
Total 13,31,61421,69,84410,38,249**24,63,209

(All figures in INR)
*Interest subsidy received from NHB of INR 2,30,156/- is directly deducted from loan amount, thus directly reducing the loan amount to INR 21,69,844.

HeadsAmount (INR)
Interest Payment13,31,614/-
Tax Saved**10,38,249/-
Payment by customer post tax benefit2,93,365/-
PMAY Subsidy2,30,156
Net Payment by Customer63,209/-
Effective Interest rate for INR 24,00,000/-2.63%

** Total Tax saving is calculated at 30.90% on Loan amount of INR 21,69,844/-.
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