Buying a home is exciting, but affordability should drive your budget. A bigger sanctioned loan is not always the right loan for your lifestyle and future goals.
Rule of Thumb for Affordability
Many advisors suggest keeping total housing costs within 28-35% of monthly net income. This includes:
- EMI
- Property tax
- Insurance
- Maintenance charges
Factors That Affect Mortgage Eligibility
- Monthly income and job stability
- Existing EMIs or debt obligations
- Credit score and repayment history
- Down payment amount
- Loan tenure and interest rate
Why Tenure Matters
Longer tenure reduces monthly EMI but increases lifetime interest outgo. A shorter tenure can save significant interest if your cash flow allows it.
Plan for Hidden Costs
Beyond EMI, include:
- Registration and stamp duty
- Furnishing and moving costs
- Emergency fund after purchase
These costs can strain finances if ignored.
Safe Borrowing Strategy
- Keep a buffer for unexpected expenses
- Avoid maxing out lender-approved eligibility
- Recalculate affordability before finalizing the property
Try Our Mortgage Tools
Use the Mortgage Calculator and Mortgage Affordability Calculator before making a decision.