The decision to buy a home is a big one and creates a sense of excitement and frustration too. Many of the people in India give up the thought to buy a home because it is difficult for you to accomplish the dream entirely with the saving. By the time you accumulate saving to purchase your dream up, the real estate prices might have reached sky high and you will always lack back if you decide to purchase your home entirely with the savings. It is mandated for you to take the help of the home loan when you want to purchase your dream home in the dream city.
Buying Home Vs Renting One
Keeping apart all the benefits of owning a home with the help of a home loan, purchasing a home is a sense of accomplishment in life because the amount you sink to purchase a home is largest among the portfolio.
The value of the property will boost over a period of five years. Though you many shed a good deal of interest in the home, the appreciation in the asset value purchased will compensate the interest paid by you. If you choose to live in the rented house rather than purchasing the home, there will be no benefits of appreciation, instead, you will be just paying high-interest rates each passing year. A Recent survey revealed that 70% of flat cost have gained 15% of annual appreciation which is much lower than the rate of interest you pay for the home loan.
Slashing interest rates
There is a big cut in the home loan interest rates during recent times, this rate cut is good to save lakhs of rupees to pockets of the home loan seeker. On May 15th, one of the largest lending institutions has reduced interest rates on home loans by 0.3% following the announcement of SBI rate cut by 25 basis points. Home loan spreads over the long tenure of 10 years out of which 3 years will be fixed rate of interest followed by floating rate of interest for the rest of the period. if you experience a rate cut during the tenure of the loan, you can easily pre-pay the loan with reduced interest rate and no additional charges. This would help you to close the loan quickly than expected whereas the prices of the rented homes keep increasing by each passing year.
People who buy a home with the help of house loan tend to enjoy tax benefits towards both principal and interest payments on the home loan. according to current tax regulations of India, you will be eligible to claim tax benefit of 200,000 on the interest payment and 150,000 on the principal payment of the housing loan. Apart from this, the government of India offers interest subsidy on an interest rate of home loans through Pradhan manthri Avas yogana.