Should I prepay my home loan or invest in a SIP?

Prepaying gives a certain saving equal to your loan rate. A SIP may earn more over long periods but is not guaranteed. Many people split surplus money between both; the calculator compares the two for your loan.

Home loan prepayment vs SIP

Seven calculators. Pick a question, move the sliders, get your number.

From "how much SIP do I need?" to "should I prepay my home loan?". Every result is illustrative, at the return you choose.

Smart Financial Arbitrage Engine

Prepay Home Loan or Invest in SIP?

Understand the exact mathematical difference between clearing your loan early vs compounding your surplus savings in an Equity Mutual Fund.

The Core Financial Arbitrage Rule:Home Loan costs 8.75% interest, while Equity SIP compounds at 13%. The net spread of +4.25% creates massive compound wealth.

Home Loan Outstanding Amount

₹

₹5 Lakh₹45 Lakh₹50 Lakh₹3 Crore

Type any exact value like 4500000 or 50 Lakh

Loan Interest Rate (p.a.)

7% (Repo Base)13% (NBFC/High)

Remaining Loan Tenure

Yrs

1 Yr30 Yrs

Calculated Regular Monthly EMI:₹44,975 / mo

Extra Monthly Surplus Savings (for Prepay or SIP)

₹

₹2,000/mo₹15,000₹25,000/mo₹2 Lakh/mo

Amount you have left after paying regular EMI each month.

Expected Mutual Fund SIP Return (CAGR)

9% (Conservative)13% (Equity Average)16% (High Alpha)

Mathematical Winner: Invest in SIPHorizon: 15 Years

Investing in Mutual Fund SIP gives +₹ 40.8 L Extra Net Wealth!

While prepaying saves ₹ 15.6 L in bank interest, investing that same ₹15,000/mo in an equity SIP creates a staggering ₹ 83.4 L corpus!

Yr 9

Golden Crossover Freedom Point (Year 9)

By Year 9, your SIP portfolio value will surpass your entire remaining home loan! You have the complete freedom to prepay the remaining loan in 1 click or let it keep compounding.

Strategy A: Prepay Loan

9.2 Yrs (5.8 yrs early)

Interest Saved:₹ 15.6 L

Wealth Created:₹0 (All in bricks)

Strategy B: Invest in SIP

₹ 83.4 L Corpus

Your SIP Capital:₹ 27.0 L

Pure Compounded Gain:+₹ 56.4 L

Visual Arbitrage Simulation

Home loan prepayment vs SIP: common questions

: Prepaying gives a certain saving equal to your loan rate. A SIP may earn more over long periods but is not guaranteed. Many people split surplus money between both; the calculator compares the two for your loan.

Target Goal Precision

Instead of arbitrary investing, calculate the exact monthly SIP needed to fund life milestones like a ₹1 Crore home downpayment or child higher education.

Reverse SIP Compounder

Rupee-Cost Averaging

SIP removes the stress of timing market peaks by automatically purchasing more mutual fund units when valuations are lower.

Protects against volatility

The Power of Step-Up SIP

Increasing your monthly investment by just 10% annually with salary hikes can boost your final accumulated corpus by up to 80%.

Accelerated Compounding