Home Loan in your 20s



Confused about taking a home loan in your 20s ?


There is nothing new in this question as it arises in everyone’s mind who is earning well in his/her 20s. We are going to quickly tell you here about some important points to consider while this question arises in your mind.


You must have lots of questions related to your career or job such as which direction you want to take for your career? or If buying a home is a smart decision or not?? But there may be no clear answer for these questions, particularly when you are in 20s. Thus, we are here to help you out with this query. Here, you will have a clear picture of your ability to purchase or afford a home loan.


These are some pros and cons if you are thinking about a home loan in your 20s:




1. You can take benefit of lower interest rates: If you make extra repayments while rates are low you will reduce your loan balance, save on interest and build a buffer to minimise the impact of future rate rises. These lower rates can save your thousands for your future. You can have better negotiations of all lower interest rates.

If you are not sure by how much you might increase your repayments, you could:

  • Increase your repayments as if rates were already 2% higher
  • Round up your repayments to the nearest hundred dollars
  • Just pay what you can afford


2. Borrower will be mortgage free sooner instead later: If you buy a home with a 30-year mortgage in your twenties, well you are on your way to being “mortgage free” in the years of your retirement.


3. Have your home ownership: If your income is enough for taking a home loan then why waste money on throwing down the rent. Home ownership at age 20(which is an early age) will help you to start building equity and your financial net worth, that will hopefully grow over time.


4. You can go for an investment in your community: if you are willing to buy a home, then this is a great way to take control of your living environment and invest in the space around you, like in your neighbourhood.







1. You may not be ready to take financial decisions at age 20: There is a possibility that you may feel that you are not ready to make an investment like this. You may think that you are taking the biggest decision for a home loan so early, or this decision must be taken by your parents more than you do.


2. Is it your priority ? Do you have any other responsibility or something that is more important than a home ? Anything, maybe you would like to better start a business or have any dreams that you want to fulfil. So, think about it before opting for a home loan. As you may regret going for a home loan when any of such problems arises later.


3. Do you have stable income ? Obviously, opting for a home loan, you must be well settled to pay off the EMIs. For this you should have a stable income or job that pays well to you. Most of the people are not well settled to go for home loan in 20s that’s why they better drop this idea.


4. Are you ready for down payment ? Any bank will give you home loan for the 80% – 90% of the total value. And the remaining amount has to be paid by you. So, start saving for the down payment now.

Now, you have positive and negative both points to consider before applying for a home loan in your 20s. As the times changes, young adults are realising the need to be properly prepared and educated before entering into a world of home ownership. With the help of pros and cons, you can begin to prepare yourself for taking a home loan in your 20s.








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