5 Silver Linings of Paying House Loan Interest.

Housing finance offers to make buying a home relatively easier, but this financial aid comes at a cost known as house loan interest. And though this cost might seem like a real pain in the neck with each equated monthly installment, there are a few interesting benefits & advantages of paying this cost.

It may seem hard to believe but it’s true and to prove it, this article will highlight 5 silver linings of this expenses, that otherwise seems like a dark clouding looming over the end of every month!

1. House loan interest rates are at an all-time low.

The first silver lining of the interest you pay on a housing loan today is the fact that you are paying interest at a rate that’s never been lower than what it is. For borrowers from 10 or 15 years ago, this rate can seem like a breeze to handle. In 2008, the prime lending rate was upwards of 12% per annum and today, there are some lenders who offer interest rates starting from as low as 8.35%.

So if you’ve opted for a home loan in recent times, you should be counting your blessings and if you’ve avoided taking a home loan fearing the interest rate, then know that there has never been a better time to go in for the home loan.

2. Pradhan Mantri Awas Yojna Credit Linked Subsidy Scheme.

Or PMAY CLSS in short is another saving grace as far as house loan interest rates are concerned. If even after reading about interest rates being at an all-time low you are still iffy about going in for housing finance, then this initiative by our Government might cause you think otherwise.

This scheme aims to provide housing to all by offering subsidies on the interest applicable on your home loan as long your Annual Household Income is below 18 lakh. In fact, you can save up to 2.67 lakh with interest subsidies up to 6.5%.

3. House loan interest helps you save taxes.

The amount of in interest you pay will help you get equal deductions on your taxable income to a maximum limit of Rs. 2, 00,000 per year. This is possible under section 24 of the Indian Income Tax Act and can help you save a considerable amount of money each year!

4. There are several ways to reduce the house loan interest you pay.

For example, if you save for a bigger down payment, the interest payable will be calculated on a smaller amount thus helping you save on the total interest you have to pay. Moreover, if you work on your credit score, you can use it to negotiate a better interest rate on your home loan; even the slightest reduction can help you save loads of money over the tenure of the loan.

Another way to save the total interest payable is to make prepayments; each additional payment you make slashes the amount on which the interest is calculated resulting in lower interest payments.

5. House loan interest has a return on investment.

Paying interest helps you buy into one of the best investment in India – Land. After the tenure of the loan is complete, the total interest payable will dwarf in comparison to the value of your property after appreciating for so many years.

So if you’ve been putting of the decision to go in for a home loan simple because of the house loan interest, then it’s time to reconsider that decision. Speak to financial expert today and figure out just how the above pointers and be of help to you.

Good luck and all the best!