Updated: Feb 18, 2022, 15:51 ISTShare:
Owning a Home - A Lifestyle Statement
Owning a home is a very crucial goal in our lives. It’s a legacy, a status symbol, and a sign of a growing household. But this decision is more often than not accompanied by a Home Loan, prompting the worry of cutting down your lifestyle desires, to deal with the repayment. But with a steady and growing income stream, yourlifestyle can greatly benefit despite of a Home Loan. Choosing the right Home Loan can help improve your lifestyle because of the benefits it provides, which include:
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Longer repayment tenure has a cushioning benefit on your wallet! As the monthly EMI amounts are lesser, it helps free up cash for lifestyle expenses
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An advantage of a Home Loan with a low interest rate starting from 6.70%, with a tenure up to 30 years offered by ICICI Bank Home Loans would have less or no effect on your current lifestyle
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A Home Loan benefit can help you save money annually, as a Home Loan is eligible for tax deduction under section 80C. With a joint Home Loan, you may end up saving up to 2 lakh annually on your taxes
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Your first home also comes with Home Loan benefit of PMAY’s Credit Linked Subsidy Scheme, reducing the cost of home purchase.
How Is Your Lifestyle Affected?
In the ideal world, your standard of living and lifestyle may not be affected at all. But in case of changes in your situation like loss of job, welcoming a child, change in finances, along with a Home Loan repayment could make you ‘House Poor’, or short on liquid cash.
So, How Can You Make Sure Your Lifestyle Is Unaffected?
You can determine how your lifestyle will be affected by a Home Loan by calculating your Debt-to-Income (DTI) ratio. This is the ratio of funds that will go towards your housing (EMIs, home insurance premium) divided by your annual salary. Maintaining a DTI ratio of 28% ensures your lifestyle suffers only the minimum disadvantages of a Home Loan.
You can keep your lifestyle unaffected by a Home Loan by taking up additional sources of income, dipping into your savings and reallocating money from other investments towards your lifestyle expenses. Though, we would recommend a sound choice of Home Loan over these unsustainable options any day. For more information on balancing Home Loan repayments and lifestyle needs, visit our website, today.
