You Need This Salary To Buy Rs 1 Crore House, Check Home Loan EMI Calculator And All Other Costs – News18
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Buying a Rs 1 crore house with a home loan is a significant financial commitment, but with the right planning, it is achievable.
Check the key factors, including payment to your monthly EMI and overall financial requirements. (Representative image)
Purchasing a Rs 1 crore house is a significant financial commitment, and most homebuyers in India rely on home loans to make this dream a reality. However, understanding how much salary you need, the loan eligibility process and other associated costs is crucial before taking this step. In this guide, we’ll break down how much you need to earn to comfortably afford the loan and associated expenses. Let’s explore the key factors, including payment to your monthly EMI and overall financial requirements.
Key Assumptions for the Calculation
The following assumptions are being taken to give you an idea about how much minimum salary is required to get a loan for a house worth Rs 1 crore.
- House Price: Rs 1 crore (Rs 1,00,00,000).
- Home Loan Amount: Banks usually offer a loan of up to 80% of the property value. For a Rs 1 crore house, this means the loan will be Rs 80 lakh (Rs 80,00,000).
- Down Payment: You need to arrange 20% of the property value yourself. This amounts to Rs 20 lakh (Rs 20,00,000).
- Loan Tenure: A longer loan tenure gives smaller EMIs, and here we’ll assume a 30-year loan tenure (360 months).
- Interest Rate: The interest rate for home loans is around 8.5% per annum (subject to change based on market conditions).
- EMI Affordability: To ensure the loan is affordable, most banks recommend that your monthly EMI should not exceed 40% to 50% of your monthly income.
EMI Calculation
Now, let’s calculate the monthly EMI for the Rs 80 lakh loan.
Formula for EMI
The EMI formula is: P x R x (1+R)^N / [(1+R)^N-1]
P: is the principal loan amount
R: is the monthly interest rate, which is the annual interest rate divided by 12
N: is the loan tenure in months
Where:
P = Loan Amount = Rs 80,00,000
R = Monthly Interest Rate = Annual Interest Rate / 12
(So, 8.5% annual interest = 8.5/100 / 12 = 0.007083 monthly)
N = Loan Tenure in Months = 30 years × 12 = 360 months
Using the formula, the EMI works out to Rs 61,500 per month for a Rs 80 lakh loan.
How Much Salary Do You Need?
Salary Calculation for Loan Eligibility
Banks generally consider that 40% to 50% of your monthly income should go toward repaying the loan. Based on the EMI of Rs 61,500, here’s how we calculate the required monthly income:
If EMI is 40% of income, your monthly income should be at least:
Required Monthly Income= EMI/0.4
61,500/0.4= Rs 1,53,750
Annual Salary: If your monthly salary is Rs 1,53,750, your annual income will be:
Required Annual Salary=Rs 1,53,750×12=Rs 18,45,000
Other Costs to Consider
Down Payment:
You will need Rs 20 lakh for the down payment, which is 20% of the house value.
Stamp Duty and Registration:
Typically, stamp duty and registration charges are 6-8% of the property value. For a Rs 1 crore property, this would be around Rs 6-8 lakh.
Miscellaneous Costs:
You might have additional costs like legal fees, maintenance, home interiors, and moving expenses.
Summary
- Loan Amount: Rs 80 lakh (80% of Rs 1 crore).
- Down Payment: Rs 20 lakh (20% of Rs 1 crore).
- Monthly EMI: Rs 61,500 (for Rs 80 lakh loan at 8.5% interest for 30 years).
- Minimum Monthly Salary: Rs 1,53,750.
- Minimum Annual Salary: Rs 18.5 lakh.
Buying a Rs 1 crore house with a home loan in India is a significant financial commitment, but with the right planning, it is achievable. To comfortably afford the loan, you would need a minimum annual income of Rs 18.5 lakh, along with sufficient savings for the down payment and additional costs such as stamp duty and registration.
Before making any decisions, it’s important to assess your financial stability, other obligations, and long-term goals. If you’re ready, a 30-year loan tenure can make the monthly EMI more manageable, while helping you invest in a property that meets your needs.
By keeping your budget in mind and choosing the right loan option, you can take the necessary steps toward homeownership without overstretching your finances.
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Readers are advised to check with certified experts before making any investment decisions.
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