Invest in MF or prepay home loan

POSTED BY Vivek ON September 30, 2010 10:38 pm COMMENTS (6)

Is it advisable to continue investing in mutual fund while servicing a home alone? Or should that amount be diverted to prepay the home loan ?

6 replies on this article “Invest in MF or prepay home loan”

  1. jitendra solanki says:

    First caluculate what benefit is current home loan giving you and after prepaying your cash flow allows you to invest.

    If your home loan is saving tax to a great extent then after repaying your tax liability suddenly increases.Sometimes you don’t have to pay a single penny because of homeloan.

    Now once your tax liability increases what option you have to save taxes.Are those alternatives MF apart form ELSS you don’t have other options.

    DTC will have to be factored in.

    So take your decision considering all these factors.

  2. Whatever the interest is – re-pay all your loan first. Just calculate yourself & you will be shocked to see figures after comparison.

    Hope it will help you.

  3. It depend on lot of things:
    Percentage of EMI in overall cashflow
    Rate of Home loan
    Which MF you are investing in
    Are you confident enough that you will not panic & not make losses in MF
    Saving habbit & Discipline
    Term of loan
    Other goals
    Nature of loan First home or investment purpose
    How your financial ratios look like

  4. rakesh says:

    Well its always better to pay your loans. If you are having excess income with you it makes sense to pay your loans, you can do part pre-payment.


  5. Sunny Sodday says:

    You are mixing two different things, keep some money aside for MF SIP and keep some for Home prepay.

  6. Manish Bansal says:

    Continue Mutual Fund

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