Glossary

For the underlying formulas behind several of these, see the methodology page.

Amortisation

The process of paying off a loan through scheduled payments that cover both interest and principal, with the mix between the two shifting every month. This calculator simulates amortisation month by month rather than applying a single formula to the whole loan, which is what lets it show exactly how prepayment changes the payoff date. See the EMI guide and the methodology page.

Capital stack

Not a term everyone uses the same way, but on this site it means the full combination of down payment, mutual fund lumpsum, and EMI-funding corpus that together make up your own funds against a property's price. Every one of the calculator's 4 strategies is really just a different capital stack split of the same money. See the down payment guide.

CIBIL

CIBIL (TransUnion CIBIL) is India's leading credit bureau, and a CIBIL score is a 3-digit number, 300 to 900, that lenders use to judge how likely you are to repay debt. This calculator never checks or uses a CIBIL score, loan eligibility isn't part of what it models. The free CIBIL check linked from this site is a separate third-party tool, not part of the calculation.

Corpus

On this site, corpus specifically means the lump sum set aside to fund your EMI payments, either through an SWP or a bank account, separate from the down payment and the mutual fund lumpsum. The calculator tracks a corpus's balance, growth, tax, and depletion month by month against your actual EMI schedule. See the SWP guide and the methodology page.

Effective interest rate

The interest rate you're actually paying once any tax benefit is netted out, as opposed to the sticker rate on your loan agreement. This calculator computes it as total interest paid minus tax saved, scaled against the sticker rate; on the site's base case that works out to 5.88% under the old regime, while on the new regime, with no deduction to create a gap, the effective rate is simply the 7.5% sticker rate itself. See the tax benefits guide.

EMI (Equated Monthly Instalment)

The fixed monthly payment on a loan, covering both interest and principal, sized so the loan is fully repaid by the end of its tenure. This calculator computes EMI once, at origination, using the standard reducing-balance formula, and never recalculates it afterward; prepayment only shortens how long you pay it, never lowers the amount. See the EMI guide and the methodology page.

FOIR (Fixed Obligation to Income Ratio)

The share of your monthly income already committed to EMIs and other fixed debt obligations. Lenders use it, typically capping it around 40-50%, to decide how much more they'll lend you. This calculator never asks for your income and doesn't compute FOIR anywhere, loan eligibility isn't modelled here at all.

Gain fraction

The portion of a mutual fund withdrawal that represents investment profit rather than a return of your own original capital, the only part that's actually taxed on an SWP withdrawal. This calculator recalculates the gain fraction fresh every month, as (balance minus remaining cost basis) divided by balance, which is why the tax on an SWP withdrawal climbs over time even though the EMI it funds stays flat. See the methodology page.

LTV (Loan-to-Value)

The share of a property's price a bank will lend, with the rest expected to come from you as down payment. RBI caps this on a sliding scale, up to 90% for smaller loans down to 75% for loans above ₹75 lakh. This calculator enforces a flat 20% minimum down payment across every strategy as a stand-in for that floor, though your own lender's actual offer can be stricter. See the down payment guide.

LTCG (Long-term capital gains)

Tax on profit from an investment held long enough to qualify for long-term treatment, over a year for equity mutual funds, currently 12.5% on gains above a ₹1,25,000 annual exemption. This is the rate this calculator applies to the gain portion of every SWP withdrawal; the ₹1,25,000 exemption threshold itself isn't modelled. See the SWP guide.

Lumpsum

A one-time sum of money, as opposed to a recurring payment. On this site it specifically means the amount invested in a mutual fund upfront and left to grow untouched, distinct from the corpus, which is drawn down every month. Every strategy's mutual fund lumpsum compounds independently of whatever is happening to the corpus or the loan.

Prepayment

Any payment toward a loan's principal beyond the scheduled EMI, which shortens the loan rather than lowering the EMI. This calculator supports three separate prepayment mechanisms, extra monthly, step-up, and annual lump sum, each simulated differently and each usable on its own or combined. See the methodology page and the prepay vs invest guide.

Principal

The original amount borrowed, or at any later point, the amount still outstanding, as distinct from interest. Every EMI this calculator computes splits into an interest portion and a principal portion, and tracking how that ratio shifts month by month is most of what the amortisation schedule does. See the EMI guide.

Reducing balance

The method almost every loan in India uses to charge interest: each month's interest is calculated only on the principal still outstanding, not on the original loan amount. This is the method this calculator's EMI formula assumes throughout, and it's the reason your interest payment shrinks every month even though the EMI itself doesn't. See the EMI guide.

Section 24(b)

The section of the Income Tax Act allowing a deduction on home loan interest, up to ₹2,00,000 a year for a self-occupied property, available only under the old tax regime. This calculator applies that cap year by year against your actual interest paid that year, not a flat estimate. See the tax benefits guide.

Section 80C

The section allowing a deduction on home loan principal repayment, up to ₹1,50,000 a year, shared with other instruments like EPF, ELSS, and life insurance, available only under the old regime. This calculator applies it the same way as Section 24(b): year by year, against actual principal paid. See the tax benefits guide.

Sequence-of-returns risk

The risk that a bad stretch of returns early in a withdrawal period does damage a later recovery can't fully undo, because you're pulling money out of a shrinking balance instead of letting a growing one compound. This is why the SWP guide shows a corpus depleting sooner under a flat 1% return than under 7.5%, even though this calculator only ever simulates one flat, chosen rate rather than a variable path. See the SWP guide.

Step-up prepayment

A prepayment plan that increases by a fixed percentage every year, usually to track expected salary growth, instead of staying flat. Balanced and Aggressive Payoff both use fixed step-up rates, 3% and 5% a year; Safety First and Tax-Optimized Payoff use none. See the methodology page.

SWP (Systematic Withdrawal Plan)

A facility that lets you withdraw a fixed amount from a mutual fund at regular intervals, effectively the reverse of a SIP. This calculator's SWP mode simulates that corpus growing and shrinking month by month against your EMI, with tax charged only on the gain portion of each withdrawal. See the SWP guide and the methodology page.

Tax regime (old vs. new)

Since AY 2024-25, India's new tax regime is the default and offers lower slab rates in exchange for giving up most deductions and exemptions; the old regime keeps deductions like Section 24(b) and 80C but at higher slab rates, and only if you actively opt in. Every tax figure this calculator shows assumes the old regime, since that's the only one where a home loan deduction exists at all; on the new regime, the effective rate this tool shows becomes the sticker rate instead. See the tax benefits guide.

Tenure

The total length of time a loan is scheduled to run, expressed in months or years. Tenure is one of exactly three inputs, alongside principal and rate, that determine EMI; prepayment shortens how long the loan actually takes without changing this original number. See the EMI guide.