We have to think all these before taking loan. It%u2019s always better to take loan such that the EMI should be max of 35% of our monthly net income. So even if EMI increases definitely it will not more then 5-6% of your monthly net income. So adjusting that may not be much difficult.
Example: Say monthly net income of Mr. X is Rs 66000. 35% of 66000 is Rs 23100, so his EMI at the max should be 23100. For this emi at the fixed rate of interest 7.5% (two year ago) he can get 25lakh loan amount for 15 years tenure After 3 years if the rate of interest increase to 11%, then the EMI will be Rs ~284100. During these 3 years there may be increase in salary also, so it will be not a big problem to pay the emi.
Bottom line: Need to make lot of analysis and with care we have to take home loan.
RE:Before taking home loan
by on May 01, 2007 03:49 PM Permalink
Sorry, iam confused. You refer to fixed rate of interest. Then why would this be increasing?
RE:Before taking home loan
by Dhoom on May 01, 2007 04:11 PM Permalink
FIxed mean...it is not fixed through out the tenure, it will be fixed only for 3 years. After 3 years it will change according to the market, then that will be fixed for next 3 years. Where as in Floating it will change every once in 3 months depending on market.
RE:Before taking home loan
by Rakish Poulose on May 02, 2007 12:22 AM Permalink
there are two types of fixed loans - regular fixed and full fixed - full fixed is fixed for the entire tenure of the loan, banks don't normally give this, only during special offer to corporates - you are allowed to strike off the 3 year interest reset clause!! Luckily I could do that.
