Buying a house worth 60 lakh rupees is a wise decision only when your salary and financial planning are properly balanced. Let’s find out how much your monthly income should be to buy a house at this price.
Learn about the 3/20/30/40 formula here, which will clear up all your confusion. How much should your salary be to buy a 60 lakh rupee house? This formula will clear up the confusion.
Home loans have made the dream of buying a house much easier for the middle class. This is because buying a house requires a large sum of money, often millions of rupees, which is not possible for everyone to arrange at once. In this situation, this dream can be easily fulfilled through a home loan. But the question remains—how much home loan should you actually take?
This formula will clear up the confusion. Home loans have made the dream of buying a house much easier for the middle class. This is because buying a house requires a large sum of money, often millions of rupees, which is not possible for everyone to arrange at once. In this situation, this dream can be easily fulfilled through a home loan. But the question remains—how much home loan should you actually take?
Many people make decisions based solely on the bank’s loan eligibility criteria, which later leads to increased pressure from EMI payments. According to experts, a house should always be bought in accordance with one’s income, and only an amount of loan should be taken that can be easily repaid from one’s salary on time.
Let’s say you want to buy a house worth 60 lakh rupees. In that case, how much should your monthly income be, how much home loan should you take, and what loan tenure would be wise—you’ll find the answers to all these questions here. Learn about a formula that will clear up all this confusion.
What is this formula?
Financial experts consider the 3/20/30/40 formula to be highly suitable for buying a house or property. This formula is designed to maintain a balance in your financial health so that the home loan EMI does not put excessive pressure on your household budget.
3 = The total price of the house you are going to buy should not be more than three times your total annual income.
20 = A home loan should be taken for a maximum of 20 years. Taking a loan for less than 20 years will result in a much higher EMI. While choosing a longer tenure (like 30 years) will reduce the EMI, you will end up paying significantly more to the bank in interest.
30 = Your home loan EMI should never exceed 30 percent of your monthly take-home salary.
40 = You must pay at least 40 percent of the total price of the house as a down payment from your own pocket. If you can pay more, that’s even better.
If you want to buy a house worth 60 lakh rupees,
then according to this formula, your annual income should be at least 20 lakh rupees to buy that house. Based on this, your monthly take-home salary would be approximately ₹1,66,667. According to the 40 percent rule, you need to have ₹24,00,000 as a down payment. In that case, you would only need to take a home loan of ₹36,00,000. Let’s say you take a home loan of ₹36,00,000 from the bank for 20 years at an interest rate of 8.5%. Then your monthly EMI would be ₹31,242. According to this formula, your home loan EMI should never exceed 30 percent of your in-hand salary. 30 percent of ₹1,66,667 is approximately ₹50,000, and your EMI is ₹31,242, which you can easily afford. This will leave you with sufficient money for other expenses and savings. Even if interest rates increase in the future, you will not face any difficulty in paying the EMI.