“Why have you not yet taken a housing loan? Its high time that you go for one. Interest rates are low, economy is growing and you are anyways nearing 40s. Banks may not extend you a 20 year housing loan once you are 40.” said X. “I fail to comprehend multiple variables at play in deciding whether to buy a house today or continue to stay on rent.” said Y. “Also all my friends have gone for a housing loan and market prices of their property is up by 30-35% within 3 years. Will I ever afford to own a house if I delay my decision?”
Deciding to own a house today or later is a critical decision atleast for the employed with limited savings. Multiple factors from current income, expected growth in income, GDP growth rate of the country residing in, interest rates, real estate prices, rentals etc. all impact the decision. With an intention to help partially address the dilemma quantitatively a excel based tool has been developed. No ways is the template a comprehensive or conclusive. In fact its users should consider this as a guiding tool in making a decision. Also its a version 1. Version 2 can be developed post feedback from its users.
Guidelines to use the tool:
a) Country of residence does not matter. However, residential property to be owned should be in the same country where currently residing b) Tool helps you quantify the trade-off between owning a housing taking a housing loan or continue to stay on rent. c) Results are indicative and may not be accurate. d) Readers are advised to use it at their own discretion
The link to download the calculator is here: Housing loan vs rent calculator