Longer home loan tenure reduces EMI but increases interest cost

• Banks generally offer home loans up to an amount such that the EMI does not exceed 60 per cent of the pay you receive in hand.  

• If you have existing liabilities, say another loan, your eligibility goes down further.

• Some banks take into consideration the number of dependants you have. More dependants are equated with lower repayment capacity.

• Choose your EMI and loan tenure carefully. A longer tenure means a lower EMI, and hence more money in hand to meet other expenses. But a longer tenure increases the total interest cost you end up paying on the home loan.

• Avail deduction on principal under Section 80C (limit Rs 150,000) and on interest under Section 24 (Rs 200,000).