The financial condition of one person differs from another’s, so not all individuals can buy a house with a complete down payment. Meanwhile, property rates are skyrocketing these days, compelling home buyers to depend on a home loan, which needs to be paid in the form of EMIs every month till the end of the tenure.
Borrowers can repay the home loan for up to 30 years, depending on the lender’s tenure. Many advise taking a home loan early in life and repaying while young and still employed.
Let us discuss the right age limit for a home loan and the benefits associated with taking a loan early in life.
The Right Age to Go For a Home Loan
There isn’t a clear-cut answer to the question of what the ideal age is to apply for a home loan. The decision depends upon what age the borrower feels comfortable shouldering the responsibility of a home loan. Conventionally, the best age to go for a home loan is when you are in your mid-20s to early 30s because, at this time, people have the energy and stamina and are professionally settled to bear the cost of monthly EMIs. You can comfortably repay your loan until you reach your 40s and even consider investing in another property. Another alternative to this is that you can take a home loan at a later stage of your life when your savings are high, and you can pay larger EMIs with fewer interest rates.
Usually, the required age limit for a home loan varies from lender to lender, ranging from 21 to 65 years. What matters most is the affordability factor. The standard rule is that the monthly EMI should not exceed 30 percent of the borrower’s monthly income. Because if the EMI exceeds the limit, it will burden the borrower and disrupt their finances. So, if your home loan is not interfering with your monthly finances, then any age is ideal for you to take the loan.
Advantages Of Securing A Home Loan Early In Your Life
Ideally, the age for taking home loans should be 24, as, at this age, most individuals complete a minimum of 2 years of employment with a company. This is also a major home loan eligibility sought by most lenders. At this age, individuals also tend to overspend on things that are not necessary.
If you take a home loan at this age and pay monthly EMIs, you could stop making unnecessary expenses. The benefit of taking a home loan early in life is that you can enjoy longer tenures. It means you will get smaller EMIs to clear your debt which will be affordable. You can also finish the loan early and invest your savings in other important things. Taking a home loan at a young age leaves you with a lessened financial burden, and you can concentrate on other responsibilities in life, such as getting married and having children.
Advantages of Securing a Home Loan in your Forties and Fifties
You are eligible to take a home loan in your 40s and 50s, though you must repay it before you turn 65. The maximum age limit is another essential home loan eligibility, which differs from lender to lender. When you secure a loan late in your life, it means you have already saved enough money to be able to pay a higher EMI every month comfortably. A higher EMI means the interest rate on your home loan will be lower. Usually, people are well settled in their professional careers during their 40s and 50s and earning higher salaries, which means they can very well afford to pay the EMIs without cutting down on other regular and necessary expenses. Also, when you are nearing retirement, you have a clear idea of where you will likely settle down in the later part of your life, which helps you secure the right type of home loan.
As discussed in this article, the age limit for a home loan is a personal choice. You must know the benefits and drawbacks of taking a home loan at every stage of your life to take it according to your financial situation. The age limit does not have much role to play here. Most importantly, ensure you can afford your EMIs without cutting down on other essential expenses. At the same time, you must be able to repay the loan at the agreed tenure.