Now Reading: How much home loan EMI you can afford at Rs 50k, Rs 1 lakh, Rs 2 lakh income
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How much home loan EMI you can afford at Rs 50k, Rs 1 lakh, Rs 2 lakh income
How much home loan EMI you can afford at Rs 50k, Rs 1 lakh, Rs 2 lakh income
Experts recommend keeping home loan EMI within 40% of monthly income for comfortable repayment. On a Rs 50,000 monthly income, the affordable EMI is about Rs 20,000, on Rs 1 lakh, Rs…
Experts recommend keeping home loan EMI within 40% of monthly income for comfortable repayment. On a Rs 50,000 monthly income, the affordable EMI is about Rs 20,000, on Rs 1 lakh, Rs 40,000, and on Rs 2 lakh, Rs 80,000, according to calculations from BankBazaar.
Adhil Shetty, CEO at BankBazaar, said lenders typically assess the fixed obligation to income ratio, which includes existing and proposed EMIs, at 30% to 50% of income. However, borrowers should not rely solely on lender approval. Nitin Lalwani, a banking professional, added that affordability depends on what remains after debt repayments and essential expenses, and warned against becoming house poor.
Both experts urged borrowers to account for possible interest rate hikes, income disruptions, and changing family expenses. They also suggested considering step-up loans if future income is reasonably assured, and maintaining a liquidity buffer of several months of obligations.
Indian Opinion Analysis
The 40% EMI-to-income rule is a conservative thumb rule, not a regulatory cap. The Reserve Bank of India does not prescribe a specific EMI-to-income ratio, individual banks set their own exposure limits under the RBI's master direction on housing finance. A borrower's credit score, tenure, and existing debt also decide the final sanctioned amount. The real check comes when interest rates reset on floating-rate loans: a 2 percentage point hike on a Rs 40 lakh loan over 20 years adds roughly Rs 5,000 to the monthly EMI. The next budget or RBI policy statement could signal the direction of rates that affect these calculations.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
