1. Building a long-term asset: One of the primary advantages of buying a house is the opportunity to build a long-term asset. Rather than paying rent, you can utilize your financial resources to invest in a property, gradually building equity and value over time. A house in India today will roughly appreciate 8-10% a year, depending on multiple factors of course.
2. Fixed liability & fixed tenure – Your EMI, although may seem high initially, taking into consideration inflation, one’s annual increment in income, your EMI burden should ideally level with your earning potential and will more or less stay the same till the end, not to mention that after the fixed tenure, your outgoings will stop, barring regular maintenance or renovations that you may plan.
3. Tax Benefits: You can avail of tax deductions on both the interest paid (up to Rs 2 lakh) under Section 24 and the principal amount (up to Rs 1.5 lakh) under Section 80C. These tax benefits can significantly reduce the overall financial burden and the rate at which you borrow money from the bank.
4. Leverage low-borrowing costs from banks: No other lending rates are as low in India. Housing loan interest rates have roughly been around 8-10%, which, if discounted against inflation and income increments, will technically boil down to getting a loan at hardly a 2-3% rate, even 0% if tax benefits are added.
5. Sense of stability & security: For us Indians, owning your own home provides a sense of emotional upliftment, security, and stability. You have all the freedom to customize your own space, establish roots in a community, and enjoy the many emotional benefits of homeownership.
6. A tangible and enjoyable asset class: Real estate, esp. if it is your first home, can bring immense joy and will be enjoyed by you and your family members daily, fulfilling your societal esteem needs, unlike other asset classes such as stocks or gold, which you may not enjoy daily.
7. Pradhan Mantri Awas Yojana (PMAY): The government’s PMAY scheme, which aims to enable housing for all, provides subsidies on home loans for people in the low and middle-income groups. Under the PMAY scheme, you can receive a subsidy of up to Rs.2.67 lakh on your home loan interest rates, provided you meet certain eligibility criteria.
