Buying a dream house is always our top priority. It is one of the important financial decisions one makes. Simultaneously there will be changes in financial obligations one has to cut short their expenses, forgo their vacations etc. One may even have to liquidate their major investments & take housing loan to finance their house. Taking a housing loan becomes the longest financial obligation of your life.
Here’s an opportunity to earn back your loan by investing little extra
You have taken a housing loan and paying EMI for a particular period and if you invest little extra to the Equity Mutual Fund via SIP per month for same tenure of your EMI, you can earn returns equal to your home loan interest amount.
If you have taken a loan for Rs 5000000 and paying EMI of Rs 43000 per month for the period of 25 years and if you invest little extra to the Equity Mutual Fund via SIP say Rs 3000 per month for same tenure of your EMI i.e. for 25 years you earn returns equal to your home loan amount.
You have taken a housing loan for the tenure of say 20 years you can increase the tenure of the loan by 5 more years i.e. for 25 years. As the tenure of your loan increases the amount of EMI gets reduced. You can now invest the difference of reduced EMI into SIP.
If you have taken a loan for Rs 5000000 at an Interest rate of 9.4% and the tenure is for 20 years then the EMI amounts to Rs 46,280
If you increase the tenure by 5 years i.e. 25 years then your EMI reduces to Rs 43,337.Now if you invest this difference of reduced EMI in Equity Mutual Fund via SIP then it leads to an accumulation of investment of about/approximately worth Rs 5000000 i.e. equal to your loan amount.