When is the Right Age to Buy a Home – Should you Start Young? (2024)

By Lodha 07 December 2023

Table of Contents

Introduction

1. Buying a home at different stages of life.

2. Benefits of Buying At An Early Age In Life

3. Why Homeownership Is Suitable For The Long Run?

4. Learn More About Home Buying and Financing Here

5. Frequently Asked Questions

Owning a home continues to be a priority for most Indians. However, this step is generally taken, when people reach their 30s or when they plan to get married or start a family. People seldom realise that there are numerous benefits to owning your own home at a young age. With a little planning, one can even invest in a property at the start of one’s career. Moreover, one can always sell the property at a later stage, to upgrade to a bigger house. Here’s a look at the benefits of purchasing a property at a young age and the factors that one needs to consider, before taking this step.

Before diving right into the benefits of buying a home at an early age, let us first understand buying a home at different stages of life.

Buying at 25-30

For individuals in the 25-30 age range, one of the main benefits of buying a home is the longer mortgage repayment period, which can give them more time to pay off their mortgage and build equity in their home. Additionally, buying at a young age can provide more time to benefit from appreciation, which can result in significant growth in value. However, young buyers may face challenges such as limited savings, limited income, and uncertain life circ*mstances that can make it difficult to qualify for a mortgage and commit to homeownership.

Buying at 30-35

For individuals in the 30-35 age range, there may be more savings available, and they may have established a stable income and career path, increasing their chances of getting approved for a mortgage. Additionally, many buyers in this age range may be considering starting or expanding their families, making a stable home environment essential. However, competition for desirable homes in popular neighbourhoods can make it challenging to find the right property, and the cost of homeownership may increase as the home ages.

Buying at 40+

Finally, for buyers in the 40+ age range, one of the primary benefits of buying a home is established financial stability. With more savings and equity built up, buyers may be able to use their home equity to finance other investments or retirement. However, they may also face challenges such as limited mortgage options, more maintenance as the home ages, and higher property taxes that can be challenging for buyers on a fixed income. Moreover, as one approaches the age of 40, retirement planning becomes a priority, and acquiring a home loan may negatively impact the individual during retirement. Ultimately, the decision to buy a home at any age requires careful consideration of personal circ*mstances, finances and future goals to determine whether homeownership is the right investment choice.

Benefits of Buying At An Early Age In Life

A Home is a Financial Investment

When you are purchasing a home, you are also securing your financial future. This is because real estate prices only increase over time, and in a few years, you will be able to sell your property at a much higher price than what you bought it at. A study on new asset prices has suggested that real estate fares better in long-term investments when compared to equities. (Source)

You will Get to Build Your Credit

Purchasing a home at a young age can help you build your credit. If you procure a home loan with a lender or a bank in your 20s, it will only make your credit history look good. Also, if you can pay your home loan back in time, it will improve your credit score, even more, allowing you to get much higher loans, and consequently providing you with the opportunity to buy a better home for yourself in the future.

You will Develop Healthy Spending Habits

Buying a home at a young age is a significant financial commitment, one that can shape your spending habits for the future. Not only will you be paying off the home loan, but you will also have to purchase amenities to maintain your home.

Banks are Keener to Offer Loans to Young People

Banks are more eager to loan out money to young people, simply because they are assured that youngsters will be able to pay off their debt on time. Young people have longer employment terms, and their income will rise with age, so getting a loan will be easy when you start early.

The House Can Be a Source Of Income

You don’t necessarily have to live in the home you buy. Instead, you can rent it and use that income to pay your EMIs. This way, the EMI payments will not affect your daily expenses.

Renting V/S Buying - The Better Option?

It is true that renting a property, especially a home, has short-term benefits. Many young individuals prefer to rent than buy because they are unsure of where they want to settle down eventually, and don’t want the commitment of a home. However, there are some areas where homeownership beats property renting.

Why Homeownership Is Suitable For The Long Run?

The first and foremost benefit of homeownership over renting is the security it provides. When living on someone else's property, you essentially live on their terms. Your personal freedom may or may not be curbed by your landowner. But in your own home, you can enjoy uninterrupted freedom and security.

Rent Keeps on Increasing Each Year

Picture this, you find an excellent property and decide to pay a fairly high amount of rent for it. In six months, your landowner decides to hike your rent even further. This, coupled with your other expenses, can create an exorbitant bill for your lifestyle. Homeownership saves you from this hassle.

Once the loan is secured, you will only have to pay off a small amount at regular intervals. You will be aware of the amount of EMI you have to pay and can plan your lifestyle accordingly – no sudden increases in expenditure, as far as your home property is concerned.

Factors You Need to Consider Before Getting a Home Loan at a Young Age

Taking out a home loan at a young age is not uncommon, but there are a few factors that you need to keep in mind:

a) You will need to plan your finances effectively while taking into account your daily expenses and maintenance costs.
b) If you want to buy a house as an investment in real estate, then pay attention to the area in which it is located. Houses in upcoming areas are less expensive and provide a better return on investment.
c) Look for a house that is ready to move in. That way, you will acquire it faster and give it out on rent to help your EMI payments.

Lodha, Building a Better Life, the right way

At Lodha, guided by our vision of ‘Building a Better Life’ we follow transparent and ethical business practices. We have stringent anti-corruption, anti-bribery and anti-money laundering policies that are binding to all our associates, contractors, suppliers, subsidiaries, affiliates and sub-contractors. We ensure adherence to a high level of social, ethical and responsible practices in any business dealings by having multiple checkpoints and processes in place. Any suspected instance of policy violation is deftly investigated and appropriate disciplinary action, including suspension & termination of service or initiation of civil and/or criminal proceedings, is undertaken. Coupled with our commitment to nurturing an environment that enables growth and fulfils ambition for all our stakeholders and consumer trust in the brand; Lodha is India’s leading realty player.

Frequently Asked Questions

1. When buying a home. how should one decide on financial capacity?

When deciding on the financial capacity for buying a property, one should consider their income, expenses, debt-to-income ratio, credit score and down payment amount to ensure they can afford the monthly mortgage payments and associated costs without compromising their financial stability. It's recommended to get pre-approved for a mortgage and seek advice from a financial advisor before committing to a purchase.

2. Is buying a property after 40 too late?

No, buying a property after 40 is not too late. However, it is essential to consider factors such as retirement planning, financial stability, and long-term goals before committing to a purchase.

3. When to buy a home?

There is no specific age, as it depends on personal circ*mstances and financial stability. However, individuals in their late 20s to mid-30s may benefit from longer mortgage repayment periods and appreciation potential.

4. Is it possible to buy a house at the age of 30?

Yes, it is possible to buy a house at the age of 30. Usually, at this age, many individuals have established careers and savings, which can make it easier to qualify for a mortgage and afford the associated costs of homeownership.

5. Is 40 the right age to buy a house?
There is no set "right" age to buy a house, as it depends on personal circ*mstances and financial stability. However, individuals in their 40s may need to consider retirement planning, financial stability, and long-term goals before committing to a purchase. It is advisable to seek advice from a financial advisor before making a decision.

6. How much money should I save before buying a house in India?

The amount of money you should save before buying a house in India depends on the cost of the property and your financial situation.

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FAQs

When is the Right Age to Buy a Home – Should you Start Young? ›

While there's no “right” age, there are trade-offs between buying when you're a young adult and waiting until you're older. Why buy a home earlier in life? If you can swing it, homeownership in your twenties or thirties brings many advantages.

Find Out More ›

At what age should you purchase a home? ›

Key Takeaways:

Most first-time homebuyers make a purchase when they are 35. Buying a house at a young age can mean building equity young and getting a home paid off sooner. Purchasing a house in your 20s or earlier can also mean you feel trapped, unable to move at a moment's notice.

Is it smart to buy a house in your 20s? ›

There's no minimum age to buy a house. If you're ready and have a down payment, buying a house in your early 20s is a smart move. If you want to buy a home young, start planning now and get in touch to let us know what you need. We also have a completely free education course available for all first-time homebuyers.

Learn More Now ›

Can I afford a 200k house? ›

What income is required for a 200k mortgage? To be approved for a $200,000 mortgage with a minimum down payment of 3.5 percent, you will need an approximate income of $62,000 annually. (This is an estimated example.)

Learn More Now ›

Is it OK to buy a 25 year old house? ›

When a house is 25 years or older many components of the home are beyond their life expectancy and should have been replaced. In some cases, components have been replaced multiple times already. In other cases, components are wearing and need selective repairs and upgrades.

Get More Info ›

What age do most people buy their dream home? ›

By the numbers: The median age of all buyers increased from 31 in 1981 to 49 in 2023. Its record high was 53 last year, compared to 42 a decade ago. First-time buyers were a median of 35 in 2023 — up from 31 in 2013 and 29 in 1981. Repeat buyers were 58 — up from 52 in 2013 and 36 in 1981.

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Is it better to build a house or buy? ›

In general, you'll likely find it cheaper to buy an existing home, but market conditions always affect home prices. A home loan is less risky than a land loan and typically comes with a lower minimum down payment and a better interest rate.

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At what age do most people buy their dream home? ›

Partner / Senior Mortgage Consultant at Mortgage Capital of MN, Inc. Is it ideal for most people to buy their first home in their mid-30s? There are a few reasons why that ends up being the average age of first-time buyers in the U.S.

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Is it smart to buy a house at 25? ›

There's no right or wrong age to buy a house — just the right or wrong time. Be sure to consider your financial situation, your employment, the local housing market, and your future goals and plans. Consult a real estate agent or loan officer for professional advice if you're unsure.

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Is buying a house at 40 too old? ›

Age doesn't matter. Counterintuitive as it may sound, your loan application for a mortgage to be repaid over 30 years looks the same to lenders whether you are 90 years old or 40.

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What is the average age people pay off their mortgage? ›

But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.

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