While Dhirendra Kumar agrees with the idea, he sets down a few rules or principles one should follow
22-May-2017 •Research Desk
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Transcript: The whole idea is to make sure that you are not contributing heavily out of your income. If 60% of your income goes towards paying the EMI, it's not a wise thing. If there's any uncertainty about your job, your mental framework changes. Psychologically, we are still extremely uncomfortable with the possibility of losing our house just because we lost our jobs. Of course, 8.6% is not a very expensive borrowing but by no yardstick, it is free money. Equity will be able to generate much more returns but it will come with a great deal of uncertainty. So, it's always good to be a little conservative with your borrowings. Make sure that your EMI is not going beyond a third of your income. That should keep things under control. Broadly, I agree with the idea that one should borrow as much as possible because the investment return will be higher than the cost you will incur on the home loan.