Rule: It is always better to buy a house and pay an EMI to create an asset than to live on rent.

Exception: If the property market is overheated and home loan rates are very high, it is better to live on rent till the property prices drop to realistic levels.

15-20 is the percentage correction expected in property prices over the next 12-18 months. In certain places, where there is an oversupply, the prices have already dropped by about 20%.

2-3 percentage points is the drop expected in home loan rates in the next one year. SBI is already offering loans at 8%, compared with 11% by other lenders.

By postponing the purchase of the property by a year, the buyer can reduce his EMI by almost 28% or Rs 13,826. If he can afford an EMI of Rs 49,545, he can reduce his loan tenure by almost half from 20 years to just 10 years and 3 months.

This article is sourced from Money Today for InvestmentYogi.