According to reports from Mint, housing affordability in many Indian cities has worsened sharply, with the average household now spending 61% of its income on home loan EMIs, up from 46% in 2020. CA Vijay Kedia shared a case study of a corporate professional who purchased a ₹2.5 crore luxury 3BHK apartment with a monthly EMI of ₹1.5 lakh, leaving little room for other financial goals such as early retirement and children's education. Financial experts warn that these two goals alone require approximately ₹2.5 lakh per month over the next 10 years, far beyond what most buyers can manage. The issue came into focus again on September 9, 2026, after Mint reported how a large housing loan can gradually interfere with retirement savings, a child's education fund and regular expenses even when every EMI is still being paid on time.
As reported by Mint, financial experts emphasize that equating home loan EMI with the cost of the house may be a gross miscalculation, as the real cost extends beyond EMIs to include stamp duty and registration, interiors and furnishing, monthly society maintenance, annual property taxes, home insurance and inevitable upkeep costs. Anshi Shrivastava, Head - Personal Finance Training at 1 Finance, recommends that home loan EMIs should stay within 30-40% of the monthly take-home salary, noting that a home loan runs 15 to 20 years and income stretched thin at the start stays stretched for two decades. Sanjiv Bajaj, Joint Chairman & Managing Director, Bajaj Capital Ltd, advises buying a home without putting the rest of your financial life on hold, as salaries may grow but so do children's education, healthcare, and lifestyle expenses. LoansJagat's updated guide explains that existing monthly obligations can reduce the amount of income available for another repayment, with the useful calculation being that after every EMI and essential bills are paid, enough money should still remain for savings and unexpected costs.
According to Mint reports, if buyers realize their financial situation is becoming difficult to handle, experts recommend reworking the overall equation immediately. Bajaj suggests extending the tenure, refinancing at better rates, cutting discretionary debt, or using surplus income for part-prepayment. Shrivastava notes that extending the tenure cuts the EMI right away, though the total interest paid rises, which is far less than the cost of default. Partial prepayment using bonuses, windfalls, or maturing investments may permanently reduce the EMI or tenure, though CA Geetanshu Bhalla warns that if the EMI remains unaffordable, selling the property may be the right financial decision. LoansJagat advises that borrowers should calculate how much money remains after the EMI, essential expenses and other debt repayments, then review the outstanding principal, tenure and current loan terms before discussing restructuring, prepayment or refinancing with the lender.
As reported by Mint, when buyers purchase a home using a mortgage, the bank technically owns most of it initially, but as EMIs go in, buyers take back a portion of their house. This portion represents home equity that may increase if the property's market value rises. CA Geetanshu Bhalla suggests that selling or borrowing against the home can free up capital for clear and productive uses, such as funding education, medical bills, or starting a business, as borrowing against a house offers much lower interest rates than personal loans or credit cards. However, experts caution that interest rates on loans against property are typically higher than standard home loans, and market downturns can wipe out the equity cushion with no warning. LoansJagat notes that borrowers should retain money for essential expenses and unexpected events before using surplus funds for a large prepayment, as draining the entire emergency reserve creates another risk.
