A home loan is an easy way to buy your dream home and pay it off comfortably in Equal Monthly Installments (EMI). Since the costs of ownership are very high, especially in urban areas, many buyer credit terms vary between twenty and thirty years.
The interest rate charge on these multi-year home loans is sometimes equal to the loan amount or even more than double the repayment output. Besides prepaying the principal, are there ways to reduce or offset this interest charge over the long term?
Mathur explains this with an example.
Supporting Mathur’s point of view, Anil Pinapala, CEO and Founder of Vivifi India Finance, said that if one has disposable income after all payment obligations, it is always a good idea to start a SIP.
“This would help save more than the returns on fixed deposits and can be seen as offsetting against mortgage interest. However, investments in mutual funds are subject to market risk and, therefore, investors are advised to evaluate the fund in which they wish to invest based on their current and immediate flat-rate cash requirements, ”a he warned.
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(Edited by : Ajay Vaishnav)