Housing Loan for buying house for you in India

In the year 2005 the flat price was not so expensive. In 2008, it's
totally different. Say you want to buy a 2BHK flat in metro city. You
can opt for 1250 SFT flat. Total price of your flat would be Rs.40
lacs

Interest rate is also high. 10.5% would be your housing loan interest.

If you are thinking about buying a house using housing loan then think
mutiple times.

People with black money can proceed easily.

Let's calculate your EMI, assuming a housing loan of 40 lacs
for next 20 years at a rate of 10.5% interest

Your EMI would be Rs.38600/- per month

For self occupied house you can get tax benefit only on 1.5lacs
interest amount. So maximum tax benefit is 0.5lacs

Saving from rent - (you had to pay rent if you don't have a house) -
rent would be 10k to 15k for 2BHK house (Maximum)

If you want to live little far fron city it will come down to 5/6K

Owning a house you can save your yearly rent - 1.8lacs (max)

(Appreciation - depreciation) of your flat price a rate of 10% max

in 2007 it was 3.3%
Forget about the previous years. For example one year back the price
of raintree park flat in hyderabad was Rs3000 sft and now it's 3100/-
So last year the appreciation is only 3.3%

In the first year you need to pay Rs. 4 lacs as Interest for 40 lacs loan

your gain from loan = tax benefit + appreciation + rental amount -
yearly tax paid
For reaintree park flat it's = 0.5 + 1.32 + 1.8 - 4 = -0.38

So people bought raintreepark flat in 2007 are in loss

You can calculate this for next five years
Interest for 40 lacs loan for 2nd year to 5th years are as follows.

2nd year it's 3.9 lacs
3rd year it's 3.82 lacs
4th year it's 3.73 lacs
5th year it's 3.64 lacs

20 years is a long period... Think about this
Also think about the depreciation of your flat.

It's a big risk. Think twice before you opt for a housing loan.