Buying a house worth Rs 80 lakh on a monthly salary of Rs 1.35 lakh can be a significant financial commitment. If you are a first-time buyer or the sole earning member of your family, you need to consider many aspects like balancing loan repayments, household expenses and long-term savings.
While homeownership is a highly sought-after goal in India as it offers stability, you need to ensure that it doesn't put significant pressure on your cash flows. Before taking the plunge, you must assess whether the monthly EMI leaves enough room for everyday expenses and unexpected financial needs.
ALSO READ | Festive Shopping: What You Should Know Before Choosing A No-Cost EMI
Financing A Rs 80 Lakh Home Purchase:
Assuming you decide to buy a home worth Rs 80 lakh after 20% down payment. Your loan value becomes Rs 64 lakh.
At 8% interest for 30 years, your monthly EMI amounts to:
Loan: Rs 64 lakh
Interest: 8%
Time: 30 years
EMI: Rs 46,961
Principal Amount: 64,00,000
Interest Amount: Rs 1,05,05,936
Total Amount Payable: Rs 1,69,05,936
You also need to consider aspects like repo rate increases, which can impact your EMIs. This means that over the years, you will end up paying close to double the original loan amount.
Is Rs 47,000 EMI Viable?
As a general rule, your home loan EMI should not exceed more than 35% to 40% of your income. Considering this, Rs 47,000 per month seems viable at Rs 1.35 lakh salary.
However, you must understand that such significant EMIs make sense if you already have:
- Adequate health insurance
- Emergency funds covering 3-6 months of expenses
- Some investments
- No other significant near-term expenses (wedding, kids)
This is because your EMIs remain fixed even when your financial circumstances change. If you face a medical emergency or lose your job, meeting these repayments can become challenging.
For a home loan, the maximum amount you should borrow depends on many such factors. Overall, it is recommended to consult your specific goals with a certified expert to plan a path that also has room for savings and emergencies.
ALSO READ | Gold Near Rs 1.5 Lakh Before Diwali: What You Actually Pay For 10 Grams
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.