Longer or Shorter Home Loan Tenure ?

POSTED BY vikramhere ON September 23, 2013 12:48 pm COMMENTS (2)

Hi,

I am in the verge of signing a home loan aggreement with SBI for 27 lakhs @ 10.05%p.a. under SBI Maxi-gain. With the current Interest rate scenario would it be benefitial to go for a 15 year tenure or a 20 year tenure.

At the current ROI my EMI would be 29,097 for 180 months and would increase to 29,512 if the ROI goes up to 10.3% p.a. But if I choose for 240 months, then I get an EMI of 26,595 @ 10.3%p.a. considering RBI would increase the base rates from here on.

My question is if I can invest the difference ~ Rs.3000 in an RD and get around 37000 and repay the principal. I am totally confused which way to go and I am signing the deal on 25th, any help/calrity extended would be very helpful.

2 replies on this article “Longer or Shorter Home Loan Tenure ?”

  1. ashalanshu says:

    Dear Vikram, to keep liquidity with you, please opt for a 20Y term. Please starrt parking amount into Max Gain account equal to short fall in the 15Y EMI. This ‘ll save you interest outgo.

    Thanks

    Ashal

  2. Kariyan says:

    RD may fetch interest Rate less than House Loan Interest Rate. If you keep the money as OD extra balance, it will fetch House Loan Interest Rate and also liquidity.

    -KARIYAN

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