A person generally buys his/her dream home only once in their lifetime. These days, most of the people buying their house, do that with the help of a home loan. However, what are the important characteristics of a home loan?

The answer to this question brings us to two very key terms: interest rates and home loan tenure. Generally, the home loan tenure isn’t given as much importance as the interest rate, or even the repayment options. However, the point of this article is to emphasize on the importance and utility of the home loan tenure, which is the need of the hour given the current rise in interest rates by banks and other lenders.

The focus of this article would be to on one of the most important yet not known aspect that helps in deciding home loan tenure: the age of the borrower.

If you have ever wondered why banks are keen to know the age of the borrowers, it’s because of this reason. Banks have a policy that the younger the borrower, the higher is the loan tenure available for him/her.

According to the eligibility criteria decided by banks, the age of retirement is 60 years in case of a salaried individual, while it is 65 years in case of a self-employed individual. According to this, if one decides to take a loan in his 30's, the maximum loan tenure offered to him/her would be 20 years. Even though, some banks offer home loans for 25 years, but that is an exception rather than the rule.

These days, due to the inflation and the monetary tightening installed by the Reserve Bank of India, banks have been revising the interest rates charged from their customers. Before taking a home loan, one must always take into account the fact that interest rates fluctuate during the loan tenure. These fluctuations and revisions also have an impact on the home loan EMI, irrespective of the face if one takes a loan at a fixed interest rate or floating interest rate.