Home loan interest rates are rising. A year ago rates were at 6.7% to 7% but now arround 9%(cautioned you in our blog of 15 th July ) More importantly after initially increasing tenure now banks are increasing EMI. Looking at inflation and other macro economics indicators we feel that interest rates will remain at higher levels for longer period.
What's Solutions.
1. If you are buying home for investment purpose. Make sure your calculating property (3% Rental yield and 9% interest rates) Plus initial EMI's will have maximum interest component. So after 5 years of repayments you hardly pay any principal amount.
2. There are some options with MF SIP you can recover your loan and interest amount as well. If you give your home loan amount details we can prepare personalized presentation for you.
3. Create your asset and liabilities balanced so You remain net debt free and enjoy Tax benefits offered by Home loan ( Principle amount 80c and Interest amount section 24 )
4. Term insurance of equal amount of home loan is must. So in your absence your family members should not suffer.
Let me know if you have any query or feedback.
