A home loan is an easy way to buy your dream home and conveniently repay it in equal monthly installments (EMIs). Given the very high cost of real estate, especially in urban areas, many buyers have loan terms of between twenty and thirty years.
The interest burden on these multi-year home loans corresponds in part to the loan amount or even more than twice the repayment outflow. In addition to early repayment, are there options to reduce or offset this interest burden in the long term?
Mathur explains this with an example.
Echoing Mathur, Anil Pinapala, CEO and Founder of Vivifi India Finance, said it’s always a good idea to start a SIP when you have disposable income after all of your payment obligations.
“This would help save higher returns than fixed-term deposits and can be viewed as offsetting against the home loan interest. However, investing in mutual funds is subject to market risk and so it is advisable that investors evaluate the fund they intend to invest in based on their current and immediate future flat-rate cash needs, ”he cautioned.
Disclaimer: The views and investment tips voiced by the investment professionals on CNBCTV18.com are their own and not those of the website or its management. CNBCTV18.com advises users to consult certified experts before making any investment decisions.
(Edited by : Ajay Vaishnav)