How can home loan borrowers cope with 9% interest rates? Here are strategies
Also Read: How to calculate income tax benefits on home loan EMIs — explainedBelow is a summary of their effects along with some crucial points to remember:Higher EMIs: To start with, high interest rates present a double-edged sword for borrowers of home loans. One major challenge is the higher equated monthly payment (EMI). The EMI takes up a larger portion of your pay, leaving you with less money for other needs and discretionary purchases.
Your goals for money and lifestyle may be impacted by this. A higher interest rate can make it more difficult for you to fulfill your monthly obligations if your budget is already tight. You might have to cut back on other expenses or look for methods to increase your income.Decreased borrowing power: An increase in interest rates may significantly affect your ability to obtain a home loan.
The loan amount, interest rate, and loan tenure are all factored into the EMI calculation. The loan amount you qualify for drops when the interest rate increases for the same EMI you can afford.You might need to make a larger down payment to make up for the reduced borrowing power to maintain the size of the property that you have chosen. If you don’t have enough saved up for a larger down payment, this could be challenging.
Also Read: Top 5 banks offering low interest rates on home loans; check full listReduced interest in buying property: Excessive loan rates have the potential to be a significant deterrent to home ownership in India, having an impact on both prospective purchasers and the real estate sector overall.
