Rent vs buy a house decision is a dilemma that majority face while buying first home. It is one of the tough decisions of life. Why?
Because when common men decide to buy a house, they are actually making a decision to lead a less-abundant lifestyle. Hence, along with money, buying a house also needs a lot of willpower and motivation.
In some cities of India, residential property has become so expensive that some people decide to continue living on a rented apartment. They just cannot afford to buy a decent home. Check home affordability calculator.
While people are living in a rented apartment, they make a decision, to buy their own home. Paying rent is a lot easier than paying an EMI. How? Let’s see this with an example. But before that, let’s use a calculator.
Home Affordability Calculator
|Net Salary (Rs/month)||This value should be the average "MONTHLY SALARY" credited in your bank account in Last 12 months. This is not your CTC. If you are entering a value of Rs.1,00,000 - it means Rs.12,00,000 (=Rs.1,00,000x12) was credited into you salary account in last 12 months|
|Rent (Rs/month)||Indicate the average monthly rent you are expected to pay in next 12 months|
|Other Loan EMI (Rs/month)||If you have multiple other loans EMI, kindly enter the cumulative value of all EMI's here.|
|Asset Size (Rs.)||You must enter here the total value of savings plus investments (cash, FD, mutual funds, stocks, gold, etc.)|
|Expected Home Loan Interest (%)||If you will avail a home loan, what is the expected interest you will be charged by the bank/lender|
|Loan Tenure (Years)||What will be the period for which you are expected to take the loan (7,10,15,20 years?)|
|Purchase Price of Home||Value||Remarks|
|Your EMI Affordability (Rs.)||This is the maximum value you should pay per month as your home loan EMI|
|20% Downpayment (Rs.)||This is the minimum downpayment you are expected to pay to avail a home loan. Zero (0) value indicates you've enough asset to buy the property without any loan|
|Value of Home (Rs.Lakhs)||This is the maximum you can spend to buy a home with your net income (or Asset size)|