Should you choose lower EMI or lower interest rate while taking home loan?

Topics Home Loan

  • Loan tenures can go up to 30 years. Give thought to the tenure of home loan you opt for
  • On a home loan of Rs 50 lakh taken at an interest rate of 8.5 per cent for 20 years, your EMI will be Rs 43,391.
  • Your total interest cost over the tenure of the loan will be Rs 54,13,879.
  • If you extend the loan tenure to 30 years, your EMI will become a more affordable Rs 38,446.
  • However, your interest cost over the loan tenure will rise to Rs 88,40,443.
  • In other words, your interest cost will increase by Rs 34,26,564
  • Besides comparing interest rates offered by different players, also compare the processing fee, as this will make a difference to the total cost of your loan

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel