Home Loan vs Rent: Sometimes it comes to the mind of a employed person living in the city that if you have a house, it would have been good, the amount of money is spending on the rent. In that much, we will fill the EMI of the loan. That is, what is the benefit of spending lakhs of rupees on rent, if you get a house in the EMI of the same rupee? But it has many dimensions. Let us tell you in detail by doing 20 -year financial analysis for a house of Rs 1 crore that it is a more right option or to take home on EMI.
Buy your own house
It is not a big deal to cost 1 crore rupees in today’s time to buy a house right 2-3bhk in any metro city. If you buy a value of Rs 1 crore value. So you have to pay about 20 percent of the value of the house value as a down payment. That means 20 lakh rupees of 1 crore. After this, you have to pay the loan at Rs 80 lakh.
Suppose the average interest rate of home loan is 8.5%. If you take a loan for a period of 20 years, then your monthly EMI will be around Rs 69,426. In the entire 20 years, you will pay about 86.6 lakh rupees only as interest. This means that the total price of the house will be. ₹ 20 lakh (Down Payment) + ₹ 80 Lakh (Loan Principal) + ₹ 86.6 Lakh (Interest) = About ₹ 1.86 crore. Now if we consider 6% annual property growth, then after 20 years the price of this house can reach about 3.21 crore rupees. That is, you spent Rs 1.86 crore and after 20 years you will have a property of Rs 3.21 crore.
Calculation of Rental Property
Now, suppose you take a house with a value of 1 crore on rent and for that you have to pay a fare of 40 thousand rupees a month and if the fares increase by 10 percent, then it will reach 2.67 lakh rupees for 20 years. According to this, you will have to pay about 2.75 crore rupees as rent in 20 years.
Who will be the real benefit after 20 years?
If the fare increases at a rate of 10% every year, then buying a house in the long term can prove to be more beneficial. After purchasing, after 20 years you will have a valuable assets. At the same time, in the event of renting, your expenses will continue to increase and you will have very little savings in the name of investment. Nevertheless, this decision cannot be taken only on data. How much is your earnings in this, where do you live, how is your job and lifestyle, it also matters. Both of them also have their own losses and taking their own homes. For example, you can change home anytime by renting it. But, cannot change your own house. Until it sells it.