People in urban cities in India always juggle in between daily expenses and liabilities. Liabilities like home loan and car loan often becomes a burden and people end up buying low budget homes to sustain their daily necessities. Home affordability is a topic of study and there are many myths and concepts about home affordability. One of those is the home loan EMI should not go beyond 28 % of your monthly income. But people in metro cities often seen borrowing home loan with EMI going beyond 50% of their monthly income.
What is Home Affordability?
The amount of money that you can invest in buying home is called home affordability. Home affordability is different for different category of income groups and always seems deviating from investors to investors.
Why Home Affordability Dramatically Changed In 2021?
People in metro cities like Mumbai and Navi Mumbai often seems borrowing home loans to buy their homes. Due to pandemic situation the home loan interest rates dropped down to 15 years low. So, the people can save on their EMI and even can afford big homes. For example if some one is borrowing home loan of 50 lacs for 20 years, then as per the present rate of interest on home loan for example 6.7% (as most of the bank are giving home loans at interest rates of 6.6 % to 7.00% ) the EMI that the person will need pay will be Rs. 37, 850. However, if it would have been a normal situation one would have need to Pay Rs, 41, 822 for same amount of 50 Lacs at the interest rates of 8 %.
From the above example it is clear that if a person want to buy a bigger house with a big budget, he/she can stretch their EMI till Rs.41,822 and can afford bigger house in his/her confined budget. Hence the affordability of the person increased because of lower in home loan interest rates.
However there are various other reasons that are associated with Increase In Home Affordability in the Pandemic. Few of them are as per the following:
1. Attractive housing deals and offers are available from most of the builders in the industry.
2. Cheaper home loans are available means definitely their will be a saving on interest value
3. Government has reduced stamp duty and registration charges in most of the states to give relief to the home buyers and real estate developers.
4. Due to new culture of working from home has given rise to the new essential need of having office spaces at home
5. People have understood the importance of having own home against rental homes due to pandemic situation.
Check the home loan interest rates in March 2021 in the top banks across the country.
| Bank | Home Loan Rate | Processing Fee | EMI Per Lakh |
|---|
| SBI | 6.70% | NIL | ₹ 645 |
| HDFC | 6.70% | 0.50%, Min ₹ 3,000, Max ₹ 10,000 | ₹ 645 |
| Citibank | 6.75% | NIL | ₹ 691 |
This is a great opportunity to buy your new home if you are not the one who suffered with job loss and other financial challenges in the pandemic. Situations are getting normalized and economy is rising day by day. This is the right time to grab the offers from developers and banks.
Realty investment is always an evergreen filed of investment, there are no bad days to buy property.
If you looking forward to buy properties in Navi Mumbai. We can help you to find one. We are specialized in getting deal to our clients at great prices. For more details call us on 9819472689
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