Is buying a 65 lakh house with a 60k salary and 5 lakh savings feasible?

Ans: The rate of income for you will be higher and hence please consider your monthly expenses as well before opting for the home loan.

Ans: You are 64 years old and still earning Rs. 18 lakhs annually. Living on rent for Rs. 21,000 per month seems manageable. You have savings of Rs. 80 lakhs and no other liabilities. With your two daughters married, you and your wife are financially secure in terms of dependents.

You are considering purchasing a house worth Rs. 60 lakhs. This is a significant decision and requires careful evaluation.

Assessing the Need for Purchasing a House
Renting vs. Owning
You are currently paying Rs. 21,000 monthly in rent, which equals Rs. 2.52 lakhs annually. This is a reasonable amount compared to your income of Rs. 18 lakhs per year. Owning a house, however, will bring additional costs such as property tax, maintenance, and repairs. Let's consider the benefits and drawbacks of buying a house at this stage.

Advantages of Renting:
Flexibility to move if needed.
Lower ongoing financial commitment.
Savings can continue to grow and be invested elsewhere.
Advantages of Owning:
Stability and security of owning your home.
No monthly rent payments.
Potential long-term capital appreciation.
Buying a house would use up a large portion of your savings. It might limit your liquidity and leave you with less cash for emergencies or future needs. At your age, liquidity is crucial for managing unforeseen expenses, especially healthcare-related ones.

Liquidity and Emergency Planning
You and your wife need a financial cushion for healthcare and daily living expenses. Though your earnings are good, retirement could be on the horizon. The Rs. 80 lakhs you have saved should be allocated wisely to provide for your post-retirement years.

Buying a house will deplete Rs. 60 lakhs, leaving only Rs. 20 lakhs for other needs. This may not be sufficient for future healthcare, emergencies, or lifestyle expenses.

Investment Potential
House as an Investment Option
While buying a house may seem like a good investment, it is a less liquid asset. If you need cash in the future, selling property may take time. Property prices also fluctuate based on market conditions. In contrast, keeping your savings liquid in mutual funds, fixed deposits, or other financial instruments can offer flexibility and consistent growth.

A Certified Financial Planner would typically advise against locking up too much of your savings in real estate, especially at this age. It may be better to focus on investments that offer liquidity, safety, and steady returns.

Health Care and Long-Term Planning
As you and your wife age, healthcare costs will likely rise. Keeping a significant portion of your Rs. 80 lakh savings in easily accessible and growth-oriented investments is essential. Healthcare emergencies or long-term care may arise, and selling a house during such times might not be feasible.

Consider enhancing your health insurance coverage if needed. Also, set aside funds in safe, liquid investments that can be accessed easily during emergencies.

Evaluating Your Current Income and Expenses
You are earning Rs. 18 lakhs annually, which gives you good financial stability. Your current rent of Rs. 21,000 per month is reasonable compared to your income. This leaves you with plenty of room for savings and investments.

Buying a house worth Rs. 60 lakhs may disrupt this balance. You will not only lose liquidity but also face additional expenses like property tax, maintenance, and repairs. Renting, on the other hand, provides flexibility without burdening your finances.

Benefits of Actively Managed Funds over Real Estate
If you are considering investing your Rs. 80 lakhs, actively managed mutual funds can provide better returns and more flexibility than real estate. Actively managed funds have the potential to outperform the market, as professional fund managers can adjust the portfolio based on market conditions.

In contrast, real estate is an illiquid investment and can take time to sell if needed. Moreover, real estate prices can stagnate or even decline in certain areas, making it a less attractive investment compared to mutual funds that offer both growth and liquidity.

Disadvantages of Index Funds
Some people prefer index funds for their low fees, but they are not the best option for everyone. Index funds merely replicate the market performance and may not provide significant returns over inflation in the long run. Actively managed funds, on the other hand, can potentially beat the market and give higher returns, making them more suitable for long-term wealth creation.

Disadvantages of Direct Mutual Funds
You may have considered direct mutual funds because of lower expense ratios. However, these funds do not come with expert advice, which is crucial, especially when managing significant retirement savings.

Investing through a Certified Financial Planner (CFP) and a Mutual Fund Distributor (MFD) provides access to personalized guidance. A CFP will help you balance your portfolio based on your goals, risk appetite, and time horizon. This can make a big difference in managing your wealth efficiently.

Maintaining Financial Independence
Given your age and the absence of any liabilities, it is vital to maintain your financial independence. Your income is good, but in the coming years, you may want to transition into retirement. Financial independence means having enough liquid assets to cover living expenses, healthcare, and unforeseen emergencies without worrying about market fluctuations.

Locking a large portion of your savings in real estate could compromise your financial independence. In contrast, keeping your savings in a diversified portfolio of liquid investments ensures that you can continue to manage your expenses and live comfortably.

Final Insights
Here are some important points for your situation:

Liquidity: Retain liquidity to cover emergencies, healthcare, and lifestyle expenses.

Renting: Renting at Rs. 21,000 per month is affordable and gives flexibility.

Owning a House: Buying a house may limit your liquidity and increase your financial burden.

Investments: Actively managed mutual funds offer better growth and liquidity than real estate.

Healthcare: Consider enhancing health insurance and setting aside emergency funds.

Long-Term Financial Independence: Focus on investments that provide liquidity and steady growth for retirement.

At this stage of life, maintaining financial flexibility and independence should be the priority. Locking your savings into real estate may not be the best decision.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: At 29 years old with a salary of Rs. 6 lakh, it is natural to feel confused about taking a home loan of Rs. 60 lakh. Let us assess this from every angle to help you take a wise decision.

You will find clarity as we go through all important aspects. Let us go step by step.

 
 
 

Understanding Your Financial Situation
You earn Rs. 6 lakh per year. That is Rs. 50,000 per month.

 
 
 

A Rs. 60 lakh home loan means a high EMI every month.

 
 
 

Most lenders will expect you to pay Rs. 48,000 to Rs. 55,000 per month as EMI.

 
 
 

Your EMI could eat up nearly your full monthly salary.

 
 
 

This is not a comfortable or safe financial position.

 
 
 

You may not have enough left for other expenses or goals.

 
 
 

Even a small emergency can create huge stress in such a tight budget.

 
 
 

Your Age and Career Stage
At 29, you are early in your career. Growth is possible.

 
 
 

But early years also carry career uncertainties.

 
 
 

You may switch jobs or cities. Or wish to study further.

 
 
 

A big loan reduces flexibility in your career choices.

 
 
 

If income is unstable, EMI stress can become a burden.

 
 
 

It's wiser to build financial strength before big commitments.

 
 
 

Home Loan and Bank Rules
Banks allow EMI up to 50% of income in general.

 
 
 

For a Rs. 50,000 salary, safe EMI is below Rs. 25,000.

 
 
 

A Rs. 60 lakh loan goes far beyond this limit.

 
 
 

Most banks may not even approve your loan alone.

 
 
 

They may ask for a co-borrower with income.

 
 
 

Or they may reduce the loan size or increase tenure.

 
 
 

Longer tenure means more interest cost.

 
 
 

Higher loan size means higher down payment too.

 
 
 

Have you saved at least Rs. 10-15 lakh as down payment?

 
 
 

If not, you will need to take a personal loan too. That is risky.

 
 
 

Renting vs Buying in Your Case
Renting is flexible, light, and low on commitment.

 
 
 

You can change house, city, or job with ease.

 
 
 

Owning a house means heavy EMIs, taxes, and maintenance.

 
 
 

It also means less liquidity for emergencies.

 
 
 

In your income range, renting is more practical.

 
 
 

If your salary crosses Rs. 12-15 lakh later, then buying is easier.

 
 
 

Your Other Financial Goals
Do you have an emergency fund of 6 months’ expenses?

 
 
 

Do you have a health insurance and a term insurance?

 
 
 

Have you started your SIPs for wealth building?

 
 
 

Are you saving for retirement or other future goals?

 
 
 

These are more important than owning a house right now.

 
 
 

Owning a house can wait. Wealth building cannot.

 
 
 

First build strong financial foundation through SIPs in mutual funds.

 
 
 

Use regular plans through a trusted MFD with CFP credential.

 
 
 

Disadvantages of Index Funds
Index funds are unmanaged. They blindly copy the index.

 
 
 

They do not protect your money during market falls.

 
 
 

They perform well only in bullish markets.

 
 
 

There is no expert management for risk.

 
 
 

Actively managed funds have better downside protection.

 
 
 

A Certified Financial Planner can help you choose better performing funds.

 
 
 

Dangers of Direct Mutual Funds
Direct funds seem cheaper but are often misused.

 
 
 

There is no guided review or personalised help.

 
 
 

You may make wrong choices in fund type or category.

 
 
 

Without an expert, your returns can suffer over time.

 
 
 

Always prefer regular funds with guidance from a CFP through an MFD.

 
 
 

Emotional Readiness to Own a Home
Owning a house feels good emotionally.

 
 
 

But emotional comfort must match financial strength.

 
 
 

Are you buying to impress family or society?

 
 
 

Or do you really need a house now?

 
 
 

Let emotions wait. Let logic lead.

 
 
 

Financial peace is better than emotional impulse.

 
 
 

Rising Cost of Living
Food, rent, fuel and lifestyle costs are all rising.

 
 
 

EMIs should never choke your day-to-day comfort.

 
 
 

Sudden expenses like weddings, illness or loss of job can hit.

 
 
 

With a high loan, you will have no cushion.

 
 
 

Living within means is safer than stretching for status.

 
 
 

Use the Time to Grow Your Wealth
Build your SIPs slowly and increase them every year.

 
 
 

Build Rs. 30 to 50 lakh over 5-7 years in mutual funds.

 
 
 

This can become your future home down payment.

 
 
 

Or help you buy a house without a huge loan.

 
 
 

Let compounding work for you first.

 
 
 

Your Long-Term Security
What if you want to retire early?

 
 
 

What if you want to start a business in 5 years?

 
 
 

What if you want to support parents or travel the world?

 
 
 

All these dreams need money and flexibility.

 
 
 

A home loan of Rs. 60 lakh ties you down.

 
 
 

Delay it till your income is strong and stable.

 
 
 

Don’t Mix Insurance with Investment
If you are also paying for LIC or ULIP policies, rethink them.

 
 
 

These policies have poor returns and high lock-in.

 
 
 

If you hold them, consider surrendering and reinvesting in mutual funds.

 
 
 

Mutual funds give more transparency and higher long-term growth.

 
 
 

Income-to-EMI Ratio Must Be Comfortable
Ideally, EMI must not exceed 30% of your take-home salary.

 
 
 

You are far above this limit with Rs. 60 lakh loan.

 
 
 

Wait till your income crosses Rs. 1.5 lakh per month.

 
 
 

That is the time to take big commitments safely.

 
 
 

Loan Eligibility is Not Same as Affordability
Just because the bank approves, doesn’t mean you can afford.

 
 
 

Banks do not check your lifestyle goals or future plans.

 
 
 

You must take full responsibility of your decision.

 
 
 

Afford only what fits your budget and life goals.

 
 
 

Market Cycles and Interest Rates
Interest rates are not fixed forever.

 
 
 

EMI may go up in the future if rates rise.

 
 
 

That will add more pressure on your income.

 
 
 

Property markets may also not grow much in 5 years.

 
 
 

Do not assume your house will grow quickly in value.

 
 
 

Focus more on liquidity and wealth than immovable assets.

 
 
 

Building Net Worth with Peace of Mind
Mutual fund SIPs give you peaceful growth without burden.

 
 
 

They are flexible, liquid and growth-oriented.

 
 
 

You can pause, stop or increase anytime.

 
 
 

You can access money in emergencies.

 
 
 

You are in full control of your money.

 
 
 

Finally
A home loan of Rs. 60 lakh is too big for Rs. 6 lakh income.

 
 
 

It can cause stress and reduce life quality.

 
 
 

First focus on saving, investing, and growing your income.

 
 
 

Once your income grows and savings rise, buying a house gets easier.

 
 
 

For now, rent peacefully and invest wisely.

 
 
 

Build a secure financial base before taking large loans.

 
 
 

You are doing well already by thinking long term. Keep going.

 
 
 

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: Assessing Your Home Loan Readiness at Rs. 40,000 Salary

Taking a home loan is a big decision.

At 29, you have age on your side.

But your current salary matters most.

Let us look at every aspect carefully.

This is a 360-degree review of your situation.

Each point is explained in simple words.

You will understand all pros and cons.

You can then decide with full clarity.

Income versus Loan Size

Your salary is Rs. 40,000 per month.

A Rs. 60 lakh loan is very large for this income.

Home loan EMI on this loan may go beyond Rs. 45,000.

That is already more than your salary.

Banks usually allow only 40-50% of salary as EMI.

You may not get loan approval unless you have co-applicant.

Or unless you show large additional income from other sources.

Even if loan is approved, repayment will be stressful.

You may not have money left for basic expenses.

No room will be left for savings or emergencies.

Loan Eligibility Issues

Banks look at your income and age.

With Rs. 40,000 income, ideal loan is only Rs. 15-20 lakhs.

You may be offered higher loan if there is property co-owner.

A working spouse or parent as co-applicant helps.

But both of you will be under financial pressure.

It can cause stress in future.

Living Costs and Budget Strain

After taxes and deductions, net salary may be Rs. 35,000.

Out of this, rent, food, transport, utilities all need money.

If EMI alone becomes Rs. 45,000, there is no money left.

You may borrow more to cover living.

This creates debt trap very early in life.

Emergency Needs and Savings Impact

Emergencies come without warning.

You need savings for hospital, family needs or job loss.

EMI burden leaves nothing for saving or insurance.

In an emergency, your loan EMI may default.

That hits credit score badly for many years.

Recovery agents can also become a problem.

Job Security and Income Uncertainty

You are still young and career is just beginning.

You may change jobs or shift cities later.

Some months may have no salary or less salary.

In such months, you will struggle to pay EMI.

That stress affects health and career both.

Better Alternatives for Now

Instead of buying house, first build wealth.

Start SIPs in actively managed mutual funds.

Prefer regular plans through CFP and MFD.

Avoid direct funds. They offer no guidance or support.

Direct funds suit experts, not new investors.

You get no behavioural coaching or rebalancing support.

Regular funds offer ongoing help from certified professionals.

They also help you stick to your goals.

Avoid Index Funds for Now

Index funds just copy market. They never beat it.

They work well in developed markets, not in India.

Indian markets still offer alpha from active management.

Good fund managers beat index through smart allocation.

So prefer active funds with proven track records.

Always invest through MFD guided by a Certified Financial Planner.

Renting is a Smarter Option for Now

You can live in a good house on rent.

Rent will be much less than EMI.

This keeps your budget flexible and manageable.

You can change house as per need or job.

No property tax, no maintenance cost, no loan stress.

Buying Later with Confidence

Build a strong financial base first.

Grow income and increase savings rate.

Invest in equity mutual funds through SIP.

Build Rs. 10-15 lakhs in 5 years.

At that stage, think about home buying.

Your loan eligibility will also improve.

Then you can afford EMI without fear.

Insurance Cover is Important

You must protect yourself before buying house.

Take a pure term insurance cover of Rs. 50 lakhs at least.

Also get Rs. 5 lakh health cover for yourself.

Without these, your family may face burden if something happens.

Discipline and Patience are Key

Do not rush to buy house early.

It may look attractive but becomes financial trap.

Rent for now. Invest wisely. Build wealth.

In 5 to 7 years, buy comfortably with higher income.

That way your future remains free and peaceful.

Evaluate Your Current Liabilities

Check if you have any other EMIs or credit card dues.

Avoid adding more debt over existing debt.

Too many loans affect loan approval and credit score.

Clear all short-term loans before thinking of home loan.

Plan Your Finances First

Create a monthly budget with a CFP.

Plan for expenses, savings and goals.

Track your cash flow every month.

Keep minimum 6 months’ expenses in bank as emergency fund.

Review your financial plan every year.

Understand Emotional Pressure

Friends or family may push you to buy now.

But your situation is unique and needs analysis.

Emotional buying causes financial damage later.

Think long term. Be logical and practical.

Loan Against Property is Risky

If you can't repay loan, bank will take the house.

This becomes huge emotional and financial loss.

Never commit to EMI if you are unsure about stability.

Your first focus should be building secure financial foundation.

Build Good Credit History

Take a small consumer durable loan or credit card.

Use and repay on time for 2-3 years.

This builds strong credit score.

When you apply for home loan later, it helps.

Stay Away from ULIPs or Endowment Plans

These mix insurance and investment.

They offer poor returns and high charges.

Buy pure insurance separately. Invest separately.

ULIPs block your money for 5+ years unnecessarily.

Do Not Depend on Real Estate Appreciation

Property prices don’t always go up fast.

Property also has high maintenance and taxes.

You can’t sell part of it when in need.

Mutual funds give flexibility and better liquidity.

Use Surplus to Start SIP Now

Even if you save Rs. 5000 per month, start SIP.

Prefer balanced funds or multi-asset funds for start.

Slowly increase SIP as income rises.

Let this habit grow wealth quietly over time.

Finally

You are young and have time on your side.

But salary of Rs. 40,000 can’t support Rs. 60 lakh loan now.

Avoid loan stress. Build income and savings first.

Rent and invest. Plan with a Certified Financial Planner.

You will be in strong position within 5-7 years.

Then you can buy house peacefully and proudly.

Until then, stay focused on growth and savings.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment