Q.A home loan of ₹5,00,000 is sanctioned at 12% per annum, to be repaid over 24 monthly instalments. Find the EMI and the total interest paid over the loan's tenure.

This is the same EMI formula as for a personal loan, applied here to a home loan's larger principal and longer tenure; once the EMI is found, the total interest follows from $n\times\text{EMI}-P$.

$(1.01)^{24}=1.269735$.

$\text{EMI}=\dfrac{5{,}00{,}000\times0.01\times1.269735}{0.269735}\approx23{,}536.74$

Total interest $\approx 24\times23{,}536.74-5{,}00{,}000\approx64{,}881.76$

Here $P=₹5{,}00{,}000$, annual rate $12\%$, tenure $n=24$ months — the same formula as any other loan type, only with larger numbers.

Step 1 — Monthly rate. $r = \dfrac{12}{1200} = 0.01$.

Step 2 — Compute $(1+r)^n$. $(1.01)^{24} = 1.269735$.

Step 3 — Apply the EMI formula.

Step 4 — Total repaid and total interest.

A common slip when finding total interest is subtracting $P$ from a single month's EMI instead of from the total repaid ($n\times\text{EMI}$) — the total interest is spread across every instalment over the whole tenure, not contained in any single month's payment.