🏠 One rule I strongly believe in when it comes to home loans is simple: never let your EMI exceed 35 to 40 percent of your take-home salary. I have seen too many people lock themselves into EMIs that eat up half their income, leaving very little for savings, lifestyle, or emergencies. The house gives them comfort, but the loan becomes a chain.

If you earn one lakh a month, your EMI should not cross thirty five to forty thousand. At today’s rates, that translates to a loan of around forty to forty five lakhs. Go beyond this and you risk becoming house rich but cash poor. Lifestyle starts to suffer, savings stall, and any unexpected shock like a job change, a salary cut, or an interest rate hike quickly becomes a crisis.

The advantage of staying disciplined is that as your income grows, you create the flexibility to prepay and close the loan much faster. Even something as simple as putting one lakh a year into prepayments can bring down a twenty year loan to about thirteen years, and doubling that can shrink it to just ten years.

I also feel the popular advice of “do not buy a house, just invest the money in the market” misses the bigger picture. Rent goes up every year, usually five to ten percent. You can never guarantee that a rented place you like will always remain yours. And most importantly, a house is more than just a financial decision. It is security for the future, stability for your family, and the space where you build memories.

The issue is not whether to buy a house or not. The issue is how you buy it. Stick to the 40 percent rule and you give yourself the comfort of a home today while still keeping the freedom to invest, prepay, and accelerate your journey to financial independence tomorrow.