Home Loan: How much home loan should be taken to buy a house, how can you arrange for down payment..

Everyone dreams of having a house in their name one day, where they can live in peace. However, dreaming is easy, but turning them into reality is the real challenge. Especially when real estate prices are constantly rising, it is almost impossible to fulfill this dream without proper financial planning.

Now think, property rates are constantly going up, the house that was worth Rs 50 lakh yesterday has become Rs 75 lakh today. In such a situation, it is not right to sit idle, but do not worry! If you start investing a little smartly, then it will not be difficult to arrange the down payment for your dream house in the next 5 years.

When and how to start saving?

In preparation for buying a house, first, assess your needs and financial capacity. Experts recommend following the 50-30-20 rule: keep 50% of your income for essential expenses, 30% for hobbies, and the remaining 20% ​​for savings and debt repayment. This rule will help you make a financially strong plan for buying a house.

If you aim to buy a house in the next 5 years, it would be better to start saving now. This is a long-term commitment, so planning ahead of time will reduce financial pressure on you. If needed, you can change your spending habits and increase the savings share in the 50-30-20 rule.

How much home loan is right to take?

This is an important question how much home loan is right to take? For this, you have to understand the '20-30-40' rule. According to this rule:

20: The loan period should not be more than 20 years.

30: Your EMI should not exceed 30% of your in-hand salary.

40: At least 40% of the house price should be paid as a down payment.

That is, if you want to keep the loan burden low, then try to pay at least 30-40% of the amount in advance. This will prevent the stress of paying EMI for a long time.

How much loan is right for an annual salary of 10 lakhs?

Suppose your in-hand salary is Rs 10 lakh per annum. So according to the '20-30-40' rule, it is better if you do not take a loan of more than Rs 30 lakh. At an interest rate of 8.5% for 20 years, your EMI will be around Rs 3 lakh per annum. However, this is not a mandatory rule, it is just a suggestion so that there is no problem in repaying the loan.

Indian banks usually give loans up to 60% of the property value. That is, you can take a loan of up to Rs 50 lakh on your annual income of Rs 10 lakh. Now if you want to buy a property worth Rs 75 lakh, then you will have to raise at least Rs 25-30 lakh as a down payment.

How to raise money for a down payment in 5 years-

Now the question arises how to deposit Rs 25-30 lakh in the next 5 years? For this, you have to choose investment options that give better returns and also do not have much risk.

If you invest in mutual funds through SIP, then this can be a good way. Experts believe that debt mutual funds are less risky than equity funds. If you do SIP in a debt fund that gives 13% return annually, then you can deposit about ₹ 25.35 lakh in 5 years by investing ₹ 30,500 every month. This amount can help you meet your down payment target.

Gold is also a good investment option. In 2023, gold gave a return of about 13.1%, while last year this return was up to 26%. That is, if you invest in gold and hold it for a long time, then you can get good returns. However, it depends on your personal preferences.

To fulfill the dream of buying a house, planning at the right time is important. Just learn to balance your income, expenses, and investment. If you save and invest with discipline, then you can easily arrange for the down payment in 5 years.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.