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What Is Your Monthly Income Share On Home Loan?

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Purchasing a home, of course, is the biggest purchase in the life of the common man. Skyrocket real estate prices will never let you buy the home with a pocket fund in the early stages of life unless you have inherited good assets or liquid cash. Taking a home loan becomes an important financial obligation for anyone who cannot afford to buy home with the cash available in hand.  Now, wait!!!Take time to read the article completely before you step ahead hunting the right home for you, taking the home loan depending on the financial need would be the second step obliviously.


Budget is the most important thing you should stick to while hunting a home for yourself. There are homes available at the cost of 10 lakhs o 10 crores depending on the location you live in but, what fits your budget matters the most. I don’t suggest you compromise comforts for fetching the at low cost but, the repayment you make for the home loan should not stop you from reaching the other goals of life like a retirement plan, educational needs of children and other important goals of the life. You should always search home sticking to your budget limits and needed comforts.

How can I decide my budget for purchasing home?

The term for the home loan is, in fact, the longest loan duration period till date, it can even extend to the period of 30 years depending on your home loan eligibility. As the responsibility of repaying the home loan head for a long-term, it is important to calculate your repayment capacity with the help of home loan comparison eligibility calculator before you fix the budget for a home loan. All the lenders prefer the home loan borrowers to arrange 20% of the home value as down payment and the rest can be adjusted through home loan depending on your home loan eligibility. The more you can fund the down payment of the loan, lesser will be loan amount and so will be the loan EMI. Other important factors that affect your loan EMI are Home loan interest rates and term of the loan. The EMI payout for the loan exceeds your repayment capability, you can either consider increasing the loan term or down payment of the home loan. Alternatively, you can compare home loan interest rates offered by different lenders and take the decision accordingly. Making use home loan comparison eligibility calculator will help you fix the budget for home and help you in narrowing down your search results.

Rule of thumb 

Still confused!!! Though there is the rule of thumb to decide the percentage of monthly income you spend towards home loan repayment, it is advisable to restrict it to 40% of your monthly income. Though most of the lenders calculate your repayment capability based on the factors like your credit score, income size, and stability you should not let them bite more than you can chew.

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