Over the tenure of the loan, the EMI would remain more-or-less constant. It can vary if the loan has a floating rate of interest, but even that is a minor variation.

(To find out if you should go in for a fixed or a floating home loan, please read "To float or not to float, that is the question!")

But with time, your income will increase. And it will increase by leaps and bounds for sure. A part of it would of course be because you advance in your career.

But a part of the increase would be to take care of inflation. As prices of goods and services go up, companies (and government too!) would increase the pay in the form of yearly increments. The DA component of the pay also goes up to take care of inflation.

Since a home loan has a very long tenure, over time, the proportion of the EMI amount as a percentage of your income would go down sharply, because the EMIs would remain the same, but your income would grow.

Thus, what looks intimidating today would hardly pinch after just a few years.

My own example: My dad bought a house through a home loan with 25 years tenure. The EMI was Rs. 565 per month - a princely sum when the loan was taken 3 decades back, but a laughable amount to pay for a house when the loan got over some years back!

High Disposable Income

When you are young, your living expenses are usually low. You don't have to worry about paying college fees for your kids, or about your son's wedding...

And if you are single, of course your expenses are much low compared to your income... (They should be, at least!!)

The bottom line - when you are young, your expenses are limited, and therefore, you have a higher disposable income than you would have in your middle age.

Compulsory Savings

You have high disposable income, but do you have high savings? Many people don't :-)

When you take a home loan, you pay a monthly EMI. And you pay this every month, month after month…. This means that you are forced to save this amount every month - and this amount is used to build an appreciating asset for you!

Easy availability of Home Loans

Since there are so many advantages of buying a house early, what's stopping the young people?

On problem is that when you are young, and are just starting out, you don't have enough capital to buy a house. And that's where the banks or housing finance companies come into the picture.

You only need to provide the margin money, which is around 15% of the cost of the house. Home loan companies are eager and willing to finance the rest! Take advantage of this, and take the plunge!

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