Very logical calculation ...m following since long....glad ..someone is explaining ...for common man...if u remove emmotion frm practicality...its make a lot sense....just to make it faster is...increase ur income ...by any mean....
Thanks for this great video 3 - The max cost of the house, times your annual CTC. If you earn 10L, max cost of your house should be 30L 20 - The max tenure of the home loan 30 - Total EMI per annum should not be more than 30% of your CTC. 40 - minimum % that you must down pay for your house.
Good one sir.. Infact preclosure is never a good choice. We do all the hadwork by paying major emi as interest in the initial 7 years of 20 year loan, and then the principal component increases much. Better to invest the surplus cash in psu/govt bonds.. Though it would be 1.5% less than home loan %, 20nyears later atleast 50% of preclosure corpus will be left. If invested in equity, then a bumper
It is my dream to have an own house which is very emotional one and also I have drafted a plan post covering my Financial basics which includes enough Term insurance, Health insurance, 12 months emergency corpus, monthly SIP for Child's higher education & my retirement corpus. My numbers required for a house fits into all your rule except 40% down payment. I may need to wait more years then but from emotional stand point and the timeline I set, don't think I can wait till 40% down payment corpus being built. Well, I may take a calculated risk here since my current income flow takes care my Financial BASICS well enough.
3/20/30/40 actually doesn't make sense. Either you put a cap of 3 times your CTC and do a down payment of 40% or you take a loan for about 20years where you pay emi about 30% of gross salary and that decides your total house cost. The rule in complete makes no correlation and actually is confusing!
Thanks for sharing! I do have one question, why max 30% EMI rule. My EMI is 50% of the income and as I kept my loan tenure to 5 years. So that my interest portion should be less. In my case I am still learning about equity market so don't want much exposure to that. Is there any other reason for 30% rule which I am missing?
Good question! if you can live on 30% of your income that is fine. There are people who are confident of their investing skills - so for them rules can be different too...
I am planning to sell my flat and don't wish to re-invest in new property. To save the capital gains tax, is investing in National Highways Authority of India and Rural Electrification Corporation Limited a good option or do you think it is better to just pay the tax
Sir i m into my 20s... Since this November... . Is balanced advantage funds are good enough for financial independence if i will investment my 12.5 times of annual expenses... (considering my annual expenses 6 lakhs after 5 year from now) .???? Could it last for next 35 years...
Quick doubt sir 3 - does this mean that house price shouldn't be more than 3 times of the CTC or the loan amount shouldn't be more than 3 times of the CTC
@@SUBRAMONEYPV If so they will be investing in Marcellus, not watching your free video. And sir, if you know how to handle these funds, you will be a private fund manager, not a free youtube video maker. So thanks.
Good morning sir..I am 27 and working in SBI..I have a gross CTC of 10 LPA..and we get subsidised interest rates being the employee of the bank..how much can I afford to buy a flat/house..
this is ideal. If a parent subsidizes it may be possible. Or start with a worse ratio...and sell off some other assets and increase the contribution...
1980's rule need to be modified..as time changes..can't follow all thing as it is. Some points are good, some point need to strike down. Change is the law of nature.
Dear Sir, I need some clarification and guidance here. If we keep 64 Lakhs in lumpsum SIP Mutual Funds for 20 years, with a 15% CAGR, it would be roughly 10.5 crores. However, if you take a home loan of 1.5 Crores on a 1.6 Crore house @ 6.75%, for 20 years the total interest would be roughly 1.24 Crores. The EMI would be 1.15 Lakhs. Also, I intend to stay in that house in 2 years. I presently pay a monthly rent of 60,000 which I will divert towards EMI. So, in net terms my EMI burden over my current housing expenses is reduced to 55,000 a month only. I assume my rent would increase at a minimum of 5% p.a throughout this 20 years. On the otherhand, if I pay 65 lakhs (40% of 1.6 Crore) and take a 95 Lakhs loan @ 6.75%, for 20 years, the total interest would roughly be 78 Lakhs. I would have saved 45 lakhs over a period of 20 years. That over a period of 20 years would be 18,750 per month. Assuming we do a SIP of that amount for 20 years @ 15% CAGR that gives us a total return of 2.5 Crores., My net difference against my present rent would go down to 12,000. That would lead to a surplus of 43000 per month (55000 - 12000) which in a SIP for 20 years @ CAGR of 15 percent gives us 5.7 Crores, In light of the above, would investing 64 Lakhs in lumpsum and paying off higher EMI not be a more economical approach?
Switch your work location to some cheaper place.. And purchase land in a not so costly area, While being assured of Electricity, Water, Gas supply in that area.. Build a nice home as per your need.. That would be the best way.. Buying a 2BHK in Noida from Godrej, Tata like builders will cost you near 2 crore(Excluding Bank Interest and additional charges)..
This man is really rich, always taking about big figures. Hardly 20% of Indian comes in that 30-60Lakhs Annum Income group, what about others? What about other expenses, other responsibility, highly rising inflation, bank hidden charges etc? Sorry your tips are useless and doesn't belong to reality.
Agree with you that not to own a house till 50 55 .👍
Asked for it yesterday. Already got it. Thank you!
Been asking forever.. Wonderful video.
please share it!
Hope you like it! please share!
Very logical calculation ...m following since long....glad ..someone is explaining ...for common man...if u remove emmotion frm practicality...its make a lot sense....just to make it faster is...increase ur income ...by any mean....
Thank You always for guiding us with your experience. ..
Please also educate us on Rent vs Buying House ....
Thanks for this great video
3 - The max cost of the house, times your annual CTC. If you earn 10L, max cost of your house should be 30L
20 - The max tenure of the home loan
30 - Total EMI per annum should not be more than 30% of your CTC.
40 - minimum % that you must down pay for your house.
Thanks for sharing!
Person earning 60 lakh/ annum no need of any formula....
You don't know how such people live paycheck to paycheck. Also end up bankrupt too
Sir am impressed.... Am a banker but you have explained it so well...Good work...
Thanks and welcome
Never watched your video sir. But fortunately my purchase satisfies your 3/20/30/40 rule.
Do we have a calculator for this rule - It should be simple to do for visual representation - Salary, House cost, Rate -> minimum values for each
short and sweet, ji u r best at demystifying 🙏
Good one sir.. Infact preclosure is never a good choice. We do all the hadwork by paying major emi as interest in the initial 7 years of 20 year loan, and then the principal component increases much. Better to invest the surplus cash in psu/govt bonds.. Though it would be 1.5% less than home loan %, 20nyears later atleast 50% of preclosure corpus will be left. If invested in equity, then a bumper
Best advice...very practical
Only people who have been kicked out of rental homes know owning a simple 1bhk is better sometimea
This channel is for doctor to buy home😉😉 please explain for noraml middle class family for also
Agreed 👍
How bro? Just reduce the numbers as per your salary. Doctor salary was just an example
Agreed. Pls Subramoney give it for normal middle class people
Big joke
Agreed 😂
One of the best advice received
Thank you 🙏🏻
You're so welcome!
Awesome rules sir.
Thank you for giving precious advice
It is my dream to have an own house which is very emotional one and also I have drafted a plan post covering my Financial basics which includes enough Term insurance, Health insurance, 12 months emergency corpus, monthly SIP for Child's higher education & my retirement corpus. My numbers required for a house fits into all your rule except 40% down payment. I may need to wait more years then but from emotional stand point and the timeline I set, don't think I can wait till 40% down payment corpus being built. Well, I may take a calculated risk here since my current income flow takes care my Financial BASICS well enough.
3/20/30/40 actually doesn't make sense. Either you put a cap of 3 times your CTC and do a down payment of 40% or you take a loan for about 20years where you pay emi about 30% of gross salary and that decides your total house cost.
The rule in complete makes no correlation and actually is confusing!
I was in fact thinking about this same thing.. Not sure how if this can be logically explained...
If having 80 lakhs definitely will invest in good values and growth stock, will create wealth on that, where later I can buy house in ready cash.
Thank you Sir
Beautiful message sir. Really useful. Thank you for your advice ! 🙏
Thanks and welcome
Thanks for sharing! I do have one question, why max 30% EMI rule.
My EMI is 50% of the income and as I kept my loan tenure to 5 years. So that my interest portion should be less.
In my case I am still learning about equity market so don't want much exposure to that.
Is there any other reason for 30% rule which I am missing?
Good question! if you can live on 30% of your income that is fine. There are people who are confident of their investing skills - so for them rules can be different too...
@@SUBRAMONEYPV thanks Sir
As per his context only doctors should buy house, corporate employees are not good enough...😬
He's right
I don't think so...
@@sudhansusekhar2337 the statement to type is "i don't think"
@@vikram1262 please consult with your English teacher, seems like you have skipped so many classes in your school
Would be wonderful to know your opinion about education loans taken by young professional's Sir
Great knowledgeable information
Should we repay the loan? During the video conflicting ideas were described. So please clarify regarding loan repayment.
I am planning to sell my flat and don't wish to re-invest in new property. To save the capital gains tax, is investing in National Highways Authority of India and Rural Electrification Corporation Limited a good option or do you think it is better to just pay the tax
Sir i m into my 20s... Since this November... .
Is balanced advantage funds are good enough for financial independence if i will investment my 12.5 times of annual expenses... (considering my annual expenses 6 lakhs after 5 year from now) .????
Could it last for next 35 years...
Thanks for this meaning full video 🙏
Most welcome 😊
Great information and beautifully explained! Thank you.
You are so welcome!
Thanks for the information 🙏
Don't know to laugh or cry after watching his suggestion
Thanks sir
Welcome
Finally found meaningful rule
Thank you for this video sir.
If we can squeeeze those who get this much pay i think housing rates will come down its own...
Quick doubt sir
3 - does this mean that house price shouldn't be more than 3 times of the CTC or the loan amount shouldn't be more than 3 times of the CTC
fine line - 3 times ctc does not work in India unless you are earning at least 75L
The very first rule -3 will make house buying impossible in Mumbai 😀
True
Exactly
Sir, do you believe everyone watching your video earns 30 lac ctc?
About 1000 of them surely do.
@@SUBRAMONEYPV If so they will be investing in Marcellus, not watching your free video. And sir, if you know how to handle these funds, you will be a private fund manager, not a free youtube video maker. So thanks.
Thank you sir. This was very informative.
Glad it was helpful!My pleasure. Please share!
sir explain how the rules is fixed.
sir how much loan should take as per salery?
Thank u sir
Super post
Welcome
Subscribed🙏🏼. Dr Amit
My pleasure. Please share!
I follow simple theory, my house and car shall not worth more than 5 percent of my net worth
Then 99.9 percent ppl wont own a house in India
Good morning sir..I am 27 and working in SBI..I have a gross CTC of 10 LPA..and we get subsidised interest rates being the employee of the bank..how much can I afford to buy a flat/house..
Max 3L of loan per year. How much discount are you getting?
The 40 part is tough for many
this is ideal. If a parent subsidizes it may be possible. Or start with a worse ratio...and sell off some other assets and increase the contribution...
Please share trend to adopt for buying a good house by a middle man..... Not for those who earns 20 lakh an year....
1980's rule need to be modified..as time changes..can't follow all thing as it is. Some points are good, some point need to strike down. Change is the law of nature.
🙏
Somebody gives you money @7% take & invest wisely why 40% down payment when my investment earns more should take 100%loan
60 lac salary if thay save 45lac per year and after 3 year thay buy easily 1.35 Cr House
What is CTC?
Sir I find this 30 year rule very impractical
Dear Sir, I need some clarification and guidance here. If we keep 64 Lakhs in lumpsum SIP Mutual Funds for 20 years, with a 15% CAGR, it would be roughly 10.5 crores. However, if you take a home loan of 1.5 Crores on a 1.6 Crore house @ 6.75%, for 20 years the total interest would be roughly 1.24 Crores. The EMI would be 1.15 Lakhs. Also, I intend to stay in that house in 2 years. I presently pay a monthly rent of 60,000 which I will divert towards EMI. So, in net terms my EMI burden over my current housing expenses is reduced to 55,000 a month only. I assume my rent would increase at a minimum of 5% p.a throughout this 20 years.
On the otherhand, if I pay 65 lakhs (40% of 1.6 Crore) and take a 95 Lakhs loan @ 6.75%, for 20 years, the total interest would roughly be 78 Lakhs. I would have saved 45 lakhs over a period of 20 years. That over a period of 20 years would be 18,750 per month. Assuming we do a SIP of that amount for 20 years @ 15% CAGR that gives us a total return of 2.5 Crores., My net difference against my present rent would go down to 12,000. That would lead to a surplus of 43000 per month (55000 - 12000) which in a SIP for 20 years @ CAGR of 15 percent gives us 5.7 Crores,
In light of the above, would investing 64 Lakhs in lumpsum and paying off higher EMI not be a more economical approach?
Switch your work location to some cheaper place.. And purchase land in a not so costly area, While being assured of Electricity, Water, Gas supply in that area.. Build a nice home as per your need.. That would be the best way.. Buying a 2BHK in Noida from Godrej, Tata like builders will cost you near 2 crore(Excluding Bank Interest and additional charges)..
Correct
Repay with weaker rs with inflated market.👏👌
Sir i am 34yrs age I earn 1.3cr but I have a bussiness I don't pay any tax
How much cost my home should be
4 Crores ...... not more not less
The income he mentioning is before tax or after tax
before
Sir talk for common people please. 60 lac/per year he or she is king 🤴for me
Can you explain the rationale behind buying house at 55? Also how should someone fund the purchase at that age?
He is telling to save the total amount by that time. Buy it without any loan
If middle class family ur rule no can buy house and build😂😂😂😂😂
Good calculation. Will be useful for my future 👍
Talk for the middle class the upperclass doesnt need your advice
Make video for middle class people.
This video was a joke for me. Neuro surgeon with a working wife earing equally as u.. 60 lakhs per annum salary.. Wow....
60 L per annum????
Can't thank you more
Pls 🙏
Honestly.. Useless👎
60 lakhs PA. HAHAA. We live in India not USA.
This man is really rich, always taking about big figures. Hardly 20% of Indian comes in that 30-60Lakhs Annum Income group, what about others? What about other expenses, other responsibility, highly rising inflation, bank hidden charges etc? Sorry your tips are useless and doesn't belong to reality.
Thanks sir