Is EMI more cost-effective than living on rent?
EMI Vs Rent is a challenge that most of the first time home buyers faces today. Should we buy a home or rent a house? Home loans are becoming cheaper day by day. Buying is better if you plan to stay for longer than 5 years. I think if buying a home is affordable and profitable and comes in your price range then go for it or continue to rent till it really make sense to move on to your own house. Owning a home is everyone's dream but not if you are not ready for it. If you are already staying in rent and happy with it then buying a home only makes sense if the money you are paying as rent is somewhere at the same range you will pay as EMI. Consider your finances; don’t let it become your burden. Do your maths. Consider the EMI vs. rent ratio, Renting is recommended if rents are lower than the payable emi. On average we can save upto one-fourth of our earning for buying a home. We must consider the down payment other than the EMI and additional costs before buying a house. Generally 35% of monthly salary is considered as EMI payable. Down Payment can be around 20% of the total amount but If you can pay almost half of the total cost of your house it is very much recommended that you should buy the house.