EMI vs Rent: Everyone's dream is to have their own house. However, rising inflation and other expenses make many people stay in rented houses. At the same time, other people also remain confused about the fact that it is better for them to live in a rental house than to buy their own
There is a big difference between renting a house and paying the monthly installment (EMI) of the house. In the first option, you are only paying money in a rented house, but in the second option you are living in your own house with the money paid or you are going to live in the future under the scheme. Coronavirus has created a competition for people to buy their own homes in terms of security. But when and how to buy a house for anyone, this is a big question in itself. It also depends on the financial condition of the buyer. Let us know which option is better to pay monthly installments for your own house or to live in a rental house.
Buying one's own house is a big dream of every person. Explain that for the last six months, the fear of coronavirus has increased the desire of young people working from home to buy their own house. According to data from NoBroker, 65 percent of working tenants are about to buy their own house in the next three months. The reduction in interest rates is a major reason for this. After the reduction in policy interest rates by the RBI, home loan rates have also come down drastically.
People's attitude changed from Coronavirus
The second is that developers are also selling homes at very low prices. In such a situation, those wishing for a home have a big opportunity to live directly in the house instead of getting into the projects under construction according to their budget. Experts say that due to coronavirus, there has been a big change in people's thinking about buying a house. Earlier they used to think more for this. But now looking at the current situation, they feel the need.
Extension in Pradhan Mantri Awas Yojana
Another factor that forces people to buy homes at this time is the extension of the Pradhan Mantri Awas Yojana (PMAY) deadline. The government has increased its time period by one year to take advantage of this scheme. This directly means that those whose annual income is Rs 6 to 18 lakhs, they can avail interest subsidy of up to Rs 2.38 lakh in it till 31 March 2021. This is good news for first time home buyers.
Usually, the EMI of the house is more than the monthly rent. In case of taking 20% down payment and 80% loan for own house, interest has to be paid more than bank loan. Therefore, living in a rental house or apartment is more comfortable than depositing the monthly installment of the house.
Understand EMI and Rental Mathematics
When you buy a house on loan, you also have the responsibility to repay it. Let's try to explain this through a real estate property in Bangalore. He said that at present the market value of the property is 50 lakh rupees. How would someone decide to buy or rent this property.
First let's understand from the perspective of rent. If someone wants to rent this property, then he will pay 12 to 14 thousand rupees per month. This cost will increase after 11 months. Therefore, he may have to shift to a different place every year to maintain the rent or to avoid increase of about 5-10 per cent every year. Although his salary will also increase, inflation will force him to change the house of rent every year.
From the perspective of buying a house, it shows that when you buy a house on a home loan (20% down payment - 80% loan), you will get a monthly interest of 32 thousand rupees every month for 20 years at an interest rate of 7.25%. The installment has to be paid and if you pay 50% down payment, then you have to pay 20 thousand rupees monthly installment in it.
