How will home loans go up?
For Instance, SBI now offers home loans at around 6.85 per cent. For a loan amount of Rs 30 lakh and tenure of 20 years, the monthly EMI now is about Rs 22,990 per month. The total interest payable over the loan term will be about Rs 25,17,510 and the total payments made over the loan term will be Rs 55,17,510.
With the interest rates going up by 40 bps, the same loan will be priced 7.25 per cent. At the new rate, the EMI will rise to Rs 23,711 per month, an increase of Rs 721 over the old EMI of Rs 22,990.
At this rate, the total interest out go will be about Rs 26,90,707, higher by Rs 1,73,197 over the old rate. The total payment to be made will be Rs 56,90,707.
Costly affair
OLD New
30,00,000 Amount Rs 30,00,000
6.85% Rate of interest 7.25%
Rs 22990 EMI Rs 23711
Rs 25,17,510 Interest paid over the term Rs 26,90,707
Rs 55,17,510 Total amount payable Rs 56,90,707
Additional EMI to be paid Rs 721
Increase in total interest paid over the term Rs 1,73,197
