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Hans India
07-08-2025
- Business
- Hans India
Can senior citizens get a home loan? Key factors to consider
Owning a house never loses its charm, even when you are past sixty. You may fear that lenders will dismiss your application or quote an unaffordable home loan rate of interest. In truth, most Indian banks welcome older borrowers; you simply have to meet a few clear rules and use everyday tools, such as a home loan prepayment calculator, to stay on top of costs. Factors that affect home loan eligibility Age and eligibility Banks define two age bars: the age at which the loan is taken, and the age at which it must finish. Public-sector giants usually let repayment run until 70–78 years. Private lenders follow similar limits. Apply early so that the EMI remains comfortable at the prevailing home loan rate of interest. Income proof and co-applicants Lenders care more about steady cash flow than about your date of birth. Pension credits, rental receipts, annuity payouts, or Systematic Withdrawal Plans all count. Adding an earning spouse or child as a co-applicant often earns a lower home loan rate of interest. Feed these numbers into a home loan prepayment calculator first; it will show at a glance whether the proposed EMI sits safely alongside routine bills. Loan-to-Value (LTV) ratio and down payment Another important factor is the Loan-to-Value (LTV) ratio. For senior citizens, banks generally cap the LTV at 65–70 per cent, meaning you must fund at least 30–35 per cent of the purchase price yourself. If a flat costs Rs. 60 lakh, be ready with roughly Rs. 21 lakh before disbursal. This equity cushion reassures the bank and trims the absolute interest you pay. Understand the down payment you must make; if the LTV is around 65%, you must be prepared to make a down payment of 35%. Tenure, EMI, and the power of calculators Short tenures push EMIs higher. Before signing any form, punch the figures into a home loan prepayment calculator. Tweak the down payment until the EMI, at the current home loan rate of interest, still leaves room for medical and lifestyle costs. The same calculator will show how an annual Rs. 1 lakh part-payment can shave years off the schedule and save lakhs in interest. Tracking market rates Interest charges are moving targets. Let us assume a lender quoted rates starting from 7.50 per cent. Within a fortnight, the bank can cut its MCLR by 25 basis points, signalling a softer home loan rate of interest for both new and existing borrowers. Keep an eye on such tweaks; even a half-point fall can translate into meaningful savings over a seven-to-ten-year term. Charges, prepayment, and tax changes Processing fees, legal scrutiny, and valuation charges all add to the expenses. Use a home loan prepayment calculator to confirm that part-payments still make sense after these additions. Recent tax changes have removed popular deductions on housing loans (under the new regime), so forward-planning your prepayments is now even more valuable. Clearing a chunk early in the schedule captures most of the interest, saving without straining monthly cash flow. Insurance and contingency buffer Life and property insurance may be essential, adding a few thousand rupees a year. Treat the premium as risk cover, not a waste. Health setbacks can derail EMI payments, so take insurance into consideration when calculating your finances. Also, set aside a contingency fund covering at least six EMIs; this buffer protects your credit score if medical bills suddenly rise. Reverse mortgage: An alternate path If you already own a home and mainly want a monthly income stream, a reverse mortgage flips the model. Various banks lend against a self-occupied house to owners aged 60–80, paying them every month while they continue to live in it. Although you do not service any EMI, an implicit home loan rate of interest accrues on the outstanding balance and eats into the equity your heirs will inherit. Compare this cost carefully with a standard loan before deciding. Quick checklist ● Compare at least three lenders on total repayment amount, tenure, and one-time charges. ● Keep your credit score above 750; it unlocks better deals. ● Collect documents, including pension slips, bank statements, and property papers, before you apply. ● Budget for stamp duty and registration, which can add 6–7 per cent to the property price. ● Read the sanction letter for interest-reset clauses and prepayment penalties. Final word A home loan after retirement is entirely achievable. By documenting steady income, saving a healthy deposit, comparing each home loan rate of interest carefully, and running scenarios on a home loan prepayment calculator, you can enter your silver years with the keys to a new house and complete peace of mind.
India Today
07-08-2025
- Business
- India Today
Why STP and SWP matter more than SIP, explains stock market expert
When it comes to investing, most people have heard of SIPs (Systematic Investment Plans). They're easy to set up, simple to explain, and popular among new investors. But according to investor and stock market expert, Rajnish Mehan, it's not just the SIP that matters. It's the other two tools, STP (Systematic Transfer Plans) and SWP (Systematic Withdrawal Plans), that can quietly define your financial wrote on LinkedIn, 'In investing, the first and the last step often decide the whole journey. That's why STP and SWP matter more than most investors realise.' WHAT IS STP?STP is designed for situations where you have a large amount of money, say, from a fixed deposit maturity or property sale, but don't want to put it all in the market at once. The idea is to spread the risk by moving the amount gradually from a low-risk fund to equity. For instance, let's say your fixed deposit of Rs 10 lakh matures. Instead of investing the entire sum into equity funds in one go, you could park it in a liquid or debt fund and set up an STP. This way, around Rs 83,333 is transferred each month into an equity fund over a 12-month explains, 'STP builds discipline at the point of entry.' This approach protects you from investing everything during a market high, giving your money a better chance to grow ABOUT SWP?On the other end of the investment journey lies the SWP. This is more about creating a steady, reliable income, especially useful for retirees. Instead of withdrawing the entire investment, you set up fixed monthly withdrawals while the rest of your corpus stays say someone has a retirement corpus of Rs 1 crore. By setting up an SWP of Rs 50,000 a month, they get Rs 6 lakh a year in predictable income, while the rest of the money remains invested and continues to generate returns.'The purpose here is not growth, but predictable income,' Mehan points out. 'SWP builds sustainability at the point of exit.'TAX RULES TO KEEP IN MINDBoth STP and SWP come with their own tax rules. For STP, each monthly transfer is treated as a redemption from the original debt or liquid fund. So every time money is moved, there's a tax event, and the gains are taxed as per your income slab, no matter how long the money has stayed in the works a bit differently. Each withdrawal includes both the capital and the gains. Tax applies only to the gains, and the rate depends on how long you've held the investment. For equity funds, if the units withdrawn have been held for over a year, gains beyond Rs 1.25 lakh are taxed at 12.5% under long-term capital gains (LTCG).Mehan cautions that 'the nuance lies in how these cash flows interact with your long-term plan, not just in the headline tax rate.'WHY BOTH TOOLS MATTERSIPs help you enter the world of investing. But STPs and SWPs help you navigate it wisely, especially when you have a big lump sum to invest or need steady income without eating into your entire savings.'Together,' Mehan sums up, 'they complete the investing cycle. Because in the end, investing is about building a structure where money works for you when you need growth, and supports you when you need pension.'- EndsMust Watch
Economic Times
02-07-2025
- Business
- Economic Times
Elever launches India's first capital-protected monthly income PMS for retirees
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Sebi-registered portfolio management firm Elever on Wednesday said it has launched FactorCapro PMS , which it claims is India's first Portfolio Management Services (PMS) strategy designed to deliver steady monthly income with capital protection The strategy is aimed at retirees, conservative investors, and family offices, combining income generation with a capital-preserving investment on a proprietary glide-path model and a tactical asset allocation framework, FactorCapro starts with a 100% fixed-income allocation in its first year, ensuring full capital the second year onward, the portfolio transitions gradually into a diversified multi-asset mix comprising equities, debt, gold, and international ETFs. This structure is designed to adapt dynamically to market cycles using what Elever describes as a 'tactical risk rotation' framework, which aims to shield capital during downturns and enhance returns during bull launch comes against the backdrop of India's widening retirement income gap. According to the Mercer CFA Institute Global Pension Index 2024, India ranked last among 48 countries for pension adequacy, with a score of 44, down from 45.9 in 2023. Elever said FactorCapro addresses this critical shortfall by offering a transparent, professionally managed solution that balances income needs with risk management."The Indian retirement income market has long presented investors with an inadequate choice between low-yielding traditional instruments and high-risk equity exposure," said Karan Aggarwal, Co-Founder and CIO of claimed FactorCapro aims to deliver higher tax-efficient monthly income than traditional instruments such as annuities and fixed deposits. The company also highlighted that, unlike other high-income investment options such as Systematic Withdrawal Plans (SWPs) into Balanced Advantage or Equity Funds, FactorCapro is designed to maintain capital even during periods of significant market stress.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Time of India
02-07-2025
- Business
- Time of India
Elever launches India's first capital-protected monthly income PMS for retirees
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Sebi-registered portfolio management firm Elever on Wednesday said it has launched FactorCapro PMS , which it claims is India's first Portfolio Management Services (PMS) strategy designed to deliver steady monthly income with capital protection The strategy is aimed at retirees, conservative investors, and family offices, combining income generation with a capital-preserving investment on a proprietary glide-path model and a tactical asset allocation framework, FactorCapro starts with a 100% fixed-income allocation in its first year, ensuring full capital the second year onward, the portfolio transitions gradually into a diversified multi-asset mix comprising equities, debt, gold, and international ETFs. This structure is designed to adapt dynamically to market cycles using what Elever describes as a 'tactical risk rotation' framework, which aims to shield capital during downturns and enhance returns during bull launch comes against the backdrop of India's widening retirement income gap. According to the Mercer CFA Institute Global Pension Index 2024, India ranked last among 48 countries for pension adequacy, with a score of 44, down from 45.9 in 2023. Elever said FactorCapro addresses this critical shortfall by offering a transparent, professionally managed solution that balances income needs with risk management."The Indian retirement income market has long presented investors with an inadequate choice between low-yielding traditional instruments and high-risk equity exposure," said Karan Aggarwal, Co-Founder and CIO of claimed FactorCapro aims to deliver higher tax-efficient monthly income than traditional instruments such as annuities and fixed deposits. The company also highlighted that, unlike other high-income investment options such as Systematic Withdrawal Plans (SWPs) into Balanced Advantage or Equity Funds, FactorCapro is designed to maintain capital even during periods of significant market stress.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
