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Long Tenure Home Loan :

Should I take longer loan tenure?

There are both advantages and disadvantages to having a long home loan tenure. Some potential benefits of a long home loan tenure include:

Lower monthly payments: A longer loan term means that the monthly payments will be lower, which can make it easier to afford the mortgage and other household expenses.

More flexibility: A longer loan term can provide more flexibility in terms of budgeting and financial planning, as the lower monthly payments may leave more room for other expenses.

More time to build equity: A longer loan term means that you have more time to build equity in your home, which can be beneficial if you plan to sell the property in the future.

However, it is important to consider the potential drawbacks of a long home loan tenure as well. These may include:

  1. Higher overall interest costs: A longer loan term means that you will be paying interest for a longer period of time, which can result in higher overall interest costs.
  2. Reduced ability to pay off the loan early: If you have a long home loan tenure and your financial circumstances improve, you may not have the option to pay off the loan early and save on interest costs.

Limited flexibility in the event of financial hardship: If you experience financial hardship or a change in circumstances, it may be more difficult to refinance or sell the property if you have a long home loan tenure.

Overall, it is important to carefully consider the pros and cons of a long home loan tenure and choose a loan term that aligns with your financial goals and circumstances.

You can receive income tax benefits by choosing a long payback period, which can reduce your burden of paying interest on house loans. Given that no other tax benefits are as effective as the one on mortgage interest, it is preferable to take advantage of it for as long as you can. Additionally, you are permitted to deduct up to Rs. 1.5 lakh for the repayment of a home loan's principal component under Section 80C and up to Rs. 2 lakh for the repayment of interest under Section 24 of the Income Tax Act.

It must be noted that for a short repayment tenure, the principal component will be higher and you will not be able to claim the deduction beyond the specified limit.

More flexibility is available - Long repayment terms provide you a lot of options. There is no prepayment penalty, whether you take out the mortgage with a fixed or adjustable rate of return. To get out of debt, you might choose to prepay the entire loan amount or just a portion of it. You are able to pay back the loan depending on your cash flow thanks to the option of prepayment without incurring a penalty.


You may be qualified for a greater loan amount. Having a lengthier payback period also gives you the opportunity to be eligible for a higher loan amount. Given that your ability to repay the loan in the form of Equated Monthly Instalments (EMIs) determines your eligibility for a house loan, a longer duration results in a lower EMI. This is not the case if you choose a shorter tenure because you will have to pay back the borrowed sum in significant EMIs. When you select a longer term, lenders also give a higher loan amount and assist you in purchasing a larger or nicer home.



The maximum loan term for a home loan can vary depending on the lender and the loan program. In general, the maximum loan term for a conventional home loan is 30 years. However, some government-backed loan programs, such as FHA loans, may offer longer loan terms, up to 35 years.

It's not common to find a loan term of 50 years, most lenders would not offer such long terms since the interest on the loan would be accruing for such a long period of time, which would make the cost of borrowing very high. In addition, it could be difficult for a borrower to make payments on a loan that extends over such a long period, and it may not be feasible for them to repay the loan.

The best way to find out if a 50-year loan term is available in your area and whether it would be a good fit for your financial situation, is to speak with a lender or a mortgage broker who can provide you with more information and guidance. Keep in mind that a longer loan term generally means a higher overall cost of borrowing due to interest accrual. It's important to consider your financial goals, your budget and your ability to repay the loan before making a decision.


The tenure of a home loan typically ranges from 15 to 30 years. The length of the loan will depend on the borrower's financial situation and the amount of the loan. A longer loan term will result in lower monthly payments, but will also result in paying more in interest over the life of the loan.

It is important to consider your own financial situation and goals when determining the appropriate loan term.


The best loan for housing will depend on your individual financial situation and needs. Some common types of home loans include:

Conventional loans: These are not insured or guaranteed by the government and typically have a higher credit score requirement.

FHA loans: These are insured by the Federal Housing Administration and have more lenient credit score requirements.

VA loans: These are available to veterans and are guaranteed by the Department of Veterans Affairs.

USDA loans: These are available to low-income homebuyers in rural areas and are guaranteed by the U.S. Department of Agriculture.

Adjustable-rate mortgages (ARMs): These have an interest rate that can change over time, which can be beneficial for some borrowers.

It's always a good idea to compare the rates and terms of different loans, and to consult with a financial advisor or mortgage professional to determine which loan is best for your specific situation.

What are the 4 types of loans?

There are many different types of loans, but some of the most common include:

Secured loans: These loans are backed by collateral, such as a house or car. Examples include mortgages and auto loans.

Unsecured loans: These loans are not backed by collateral. Examples include personal loans and credit card debt.

Fixed-rate loans: These loans have a fixed interest rate that does not change over the life of the loan. Examples include mortgages and personal loans.

Adjustable-rate loans: These loans have an interest rate that can change over time, depending on market conditions. Examples include adjustable-rate mortgages (ARMs) and some types of business loans.

Each type of loan has its own advantages and disadvantages, so it's important to carefully consider your options and choose the loan that best meets your needs.


FAQs for Home Loans:

What is a home loan?

A home loan, also known as a mortgage, is a loan provided by a financial institution that enables individuals to purchase or refinance a home. It is typically repaid in monthly installments over an agreed-upon term.

How do I qualify for a home loan?

Qualification criteria for a home loan may vary depending on the lender and the type of loan. Generally, factors such as credit score, income, employment history, down payment amount, and debt-to-income ratio are taken into consideration.

What is a down payment?

A down payment is an upfront payment made by the homebuyer towards the purchase price of the property. It is usually expressed as a percentage of the total price (e.g., 20%). A larger down payment can result in a lower loan amount and potentially better loan terms.

What is the difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM)?

A fixed-rate mortgage has a set interest rate that remains constant throughout the loan term, providing predictable monthly payments. An adjustable-rate mortgage (ARM) has an interest rate that can fluctuate periodically, typically after an initial fixed-rate period. ARMs offer lower initial rates but can adjust over time based on market conditions.

What is PMI?

PMI stands for Private Mortgage Insurance. It is typically required for home loans with a down payment of less than 20% of the property's value. PMI protects the lender in case the borrower defaults on the loan. The cost of PMI is added to the monthly mortgage payment.

How can I improve my chances of getting approved for a home loan?

To increase your chances of loan approval, maintain a good credit score, save for a larger down payment, have a stable employment history, pay off outstanding debts, and keep your financial records organized. Getting pre-approved for a loan can also strengthen your position as a potential buyer.

What are closing costs?

Closing costs are fees associated with the purchase or refinancing of a home. They include expenses such as loan origination fees, appraisal fees, title search fees, attorney fees, and taxes. Closing costs are typically paid at the closing of the loan.

Can I pay off my home loan early?

Yes, you can pay off your home loan early. However, it's important to review your loan agreement to check for any prepayment penalties. Some loans may impose fees if the loan is paid off before a certain period. If there are no penalties, paying off your loan early can save you on interest payments.

Can I refinance my home loan?

Yes, refinancing involves replacing your current home loan with a new loan, often to secure a lower interest rate or change the loan term. Refinancing can help reduce monthly payments, consolidate debt, or access equity in the property.

Should I use a mortgage broker or go directly to a lender?

Both options have advantages. Mortgage brokers work as intermediaries between borrowers and multiple lenders, offering access to a range of loan options. Going directly to a lender allows you to work with one institution throughout the loan process. Consider your preferences, research, and consult professionals to decide which option suits your needs best.

Remember, it's always recommended to consult with a mortgage professional or financial advisor who can provide personalized advice based on your specific circumstances and goals.

Uttam Bisht

Mr. Uttam Bisht is a partner with the Delhi Branch of the firm. He has more than 8 years of experience and specializes in Statutory Audit. Expertise in Tax audit of various enterprises. Extpertise internal audit of Private enterprises. Audit planning through business understanding, preliminary analytical procedures, determining materiality levels, and preparation of audit program and pre-audit checklist . He is well conversant with the auditing standards issued by ICAI. .

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