The Reserve Bank of India has increased the Repo Rate by 2.50 percent, as a result of which most banks and NBFCs have increased the home loan interest rates by 1.5 to 2 percent. The effect of this is that home loan rates were 7.50 percent in early 2022, which has now increased to around 9.50 percent. Due to these rising rates, buying a house is now becoming more financially burdensome for consumers.

That is why it is important that while planning to buy a house, it is necessary to invest separately so that the lavish expenditure can be compensated. For this, think like smart investors. A good formula is to take the measure of SIP (systematic investment plan) along with EMI. By making regular investments through SIP, you can get good returns over time, which will make it possible to recover the funds required to buy a house. It is not difficult, just have to plan correctly.

Home loan: How much interest do you pay on the principal amount-

When you take a home loan (home loan updates), are you able to calculate how much interest you have to pay to the banks on the principal amount? Suppose you are taking a loan of Rs 35 lakh, that too for 20 years. The average interest rate of banks on home loans is around 9.5 percent these days. In such a situation, if you look at the EMI, it will be Rs 32739 every month.

In this sense, the interest you pay to the banks during 20 years will be Rs 43,57,349. If you add the principal amount to this, then the total amount you pay to the banks will be Rs 78,57,349. That is, you took Rs 35 lakh but paid around Rs 78.50 lakh, which is more than double.

Total home loan: Rs 35 lakh-
Interest rate: 9.55%
Loan tenure: 20 years
EMI: Rs 32,739
Total interest: Rs 43,57,349
Total payment to the bank instead of loan: Rs 78,57,349
(SBI Interest Rates)-
What should be done after taking a loan-
According to AK Nigam, Director of BPN Fincap, buying a house by taking a loan has become common today. A loan of Rs 30 to 40 lakh may be necessary to buy a good flat in metro cities. Therefore, instead of just paying the interest, it is also necessary to find a way to repay this loan on time. This will maintain financial stability and help the home buyer in better management.

Mutual fund SIP is a better option in today's era. As soon as the EMI of the home loan starts, SIP should be done for the same tenure. The amount to be invested in SIP should be decided based on the monthly home loan installment.

Make your home loan-free with SIP-

Your monthly EMI is Rs 32,739, from which you will pay around Rs 33,000. When the EMI starts, invest 17% of this amount i.e. about Rs 5,600 every month in a good mutual fund scheme through SIP. You will have to continue this investment for 20 years so that you can get better returns.

20 years is a long period and if we look at the return history, there are many schemes in which the SIP return in 20 years has been 15 percent or more. Here we will calculate by assuming an annual return of 12 percent.

Monthly SIP: Rs 5600-
Annual interest: 12%
Value of SIP after 20 years: Rs 55,95,228
Your total investment: Rs 13,44,000
Interest benefit: Rs 42,51,228

What result did you get by doing SIP-
Here you started SIP along with EMI. You invested Rs 5600 every month for 20 years. That means you had to invest a total of Rs 13,44,000. In return, the total value of your SIP after 20 years became Rs 55,95,228. Even if you withdraw your investment from this, you still get a profit of Rs 42.50 lakh. Whereas you are giving almost the same amount to the bank as interest. It means that by investing you made your interest zero. Note that if you have the capacity and can increase the SIP amount, then the entire house can be loan-free.

20 years: Funds giving high SIP returns-

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