3 reasons why paying-off home loans is better than paying rent.

There are a number of individuals who are caught between renting and buying a house with a home loan. It goes without saying that the latter is always the best option and this article will discuss 3 factors that support this choice.

1. You own your own home.

This is probably one of the biggest advantages of opting for a home loan and buying a home. When you stay on rent, you’re always in someone else’s house. You can’t make changes such as repaint a room or make structural changes to accommodate a growing family, or even put a nail in the wall to hang your latest family photograph. You might have living restrictions and maybe even need to ask for permission for many occasions & reasons.

These are problems you’ll never have with your own home. Paint it a color you like and repaint it if you don’t like it. Make home improvements and legal structural changes to accommodate a bigger family; you are answerable to yourself and yourself alone! Add to this the pride of owning your own home, a sign of accomplishment.

2. It beats throwing away rent money.

The money you pay towards renting buys you nothing. After 20 years of renting, you still have nothing to show for it. However, after with home loans, you could be the owner of your own home in 20 years; more than that, at the rate at which property is appreciating these days, the value of your property once the repayment tenure has come to end should easily have covered the interest cost and also bring you a considerable return on investment.

One on hand you have nothing to show for your money, even after years whereas, on the other hand, you have turned a profit and have a home of your own to show for.

3. Tax benefits of home loans.

Besides buying you your dream home, housing loans can help you save a substantial amount of money too! This is because they make you eligible to tap considerable tax deductions. For example, you can avail deductions up to Rs. 1, 50,000 against the principal repayment amount in a year under section 80C of the Indian Income Tax Act. Moreover, the interest amount you pay in a year can also provide your deductions up to Rs.2, 00,000 annually under section 24 of the Indian Income Tax Act.

If you apply with a co-applicant, say your wife. Not only will you get a better interest due to the lowered rate for women, the above tax benefits would apply both for you and your loved one thereby doubling the tax deductions available with a home loan.

So if you can’t decide between renting and buying a home with the help of home loans then keep these pointers in mind and make an informed decision. You should also consult a financial expert to see which is more suited to your needs, requirements and financial capacity.

Good luck and all the best.