Positive impactEconomy
₹40 lakh home loan: How much can you save if interest rate falls from 10% to 9% over 10, 20, 30 years?
Mint 1 hr ago·12 Oct 2026, 5:20 am
A home loan at 10% interest costs more than one at 9%, even if the principal amount is the same. This difference in rate directly impacts the total interest paid over the loan's life and the monthly EMI. The longer the tenure, the more significant the savings become, as the lower rate compounds over a longer period.
For a ₹40 lakh loan, the savings can be substantial. Over a 10-year tenure, the difference in total interest paid is around ₹2.63 lakh. Extending this to 20 years increases the savings to roughly ₹6.27 lakh, and over a 30-year period, the total savings could reach about ₹10.50 lakh. This highlights the importance of securing a lower interest rate to reduce the overall cost of borrowing.
Investors should monitor central bank policies and economic trends, as these factors influence interest rates. A shift in rates can affect the cost of loans for millions of borrowers, which in turn impacts consumer spending and the broader economy. Keeping an eye on these trends helps in making informed financial decisions.
Excerpt from Mint
A ₹ 40 lakh home loan at 9% instead of 10% could save borrowers ₹ 2.63 lakh over 10 years, ₹ 6.27 lakh over 20 years and ₹ 10.50 lakh over 30 years. Here is a breakdown of monthly EMIs, interest costs and repayment strategies. If you are availing a fresh home loan, even a minor reduction in the applicable interest…Read the original at Mint
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