Let’s understand the Home Loan calculation given below:
Interest Rate: 7.75%
Tenure (Years) 20
Monthly Income Rs 20,000 → Rs 10 Lakh Loan | EMI: Around 8000/
Monthly Income Rs 30,000 → Rs 20 Lakh Loan | EMI: Around Rs16000/-
Monthly Income Rs 60,000 → Rs 40 Lakh Loan | EMI: Around Rs32000/-
Monthly Income Rs 70,000 → Rs 50 Lakh Loan | EMI: Around 41000/-
Monthly Income Rs 90,000 → Rs 70 Lakh Loan | EMI: Around 56000/-
Monthly Income Rs 1,00,000 →Rs 80 Lakh Loan | EMI: Around 65000/-
Monthly Income Rs 1,20,000 →Rs 90 Lakh Loan | EMI: Around 72000/-
Monthly Income Rs 1,50,000 → Rs 1.2 Cr. Loan | EMI: Around 98000/-
Golden rules for buying a property
* EMI should be ≤ 35% of your monthly salary
* Keep a minimum 20% down payment
* Maintain an emergency fund before buying a house
* Avoid getting trapped in 20 year home loans
Reality Check:
* Bigger EMI = Smaller Savings
* Longer EMI tenure delays wealth creation
* Home loan interest can significantly increase the total cost of the house
Take a home loan according to your salary and income, otherwise don’t take it at all. It is better to live on rent because you can delay paying rent by 5–6 days, but you cannot do that with a loan EMI. Be smart.