Home loan tenure is a huge aspect that actually decides whether you will have a smooth repayment journey or a burdensome one. It is very crucial to choose the right loan tenure so that you can find the best way to repay your loan. Based on your loan tenure, your repayment monthly installment is decided.
It is important to choose the right EMI amount with the home loan EMI calculator and also the rate of interest that you will want to pay. There is a significant difference between someone who takes out a 15-year mortgage and someone who takes out a 30-year mortgage. The rate of interest and EMI will vary for both the different loan tenures. Therefore, it is important to choose the right loan tenure based on your repayment capacity and income.
The impact of tenure on EMI
When you take a housing loan, it is important to choose the right loan tenure because it is, in fact, the monthly installment that you pay every month. For example, an individual taking a loan tenure of 15 years and a 30-year loan will have a different monthly installment amount. 15-year loan tenure is short-term, whereas a 30-year home loan tenure is a long-term one.
Therefore, based on the loan tenure, the home loan EMI will vary. An individual taking a housing loan for 30 years will always get a low monthly installment amount, which can be repaid with ease. However, if you take a housing loan for 15 years, the monthly installment amount will be much higher in comparison to a 30-year loan. Therefore, whenever you decide to get a housing loan, you need to choose the right tenure based on your repayment capacity. If you do not have a high monthly income, it is always wise to opt for a low monthly EMI amount.
The effect of tenure on interest rates
When you plan for a housing loan, you will always find that the rate of interest is a compulsory charge that you need to pay every month. Based on the loan tenure that you choose, the rate of interest will vary. If you choose a short-term housing loan, the home loan interest rate will be high. On the other hand, if you go for a long-term loan, say 30 years, the rate of interest will be low each month. Therefore, individuals taking loans for 15 years and 30 years will have a different rate of interest. The impact of tenure on the rate of interest is huge and individuals need to consider it on a serious note.
Finishing up
Calculate the best home loan interest rate with the home loan EMI calculator. It is important to get an affordable home loan based on the right tenure.
