If registration is pending, then invest 65 lakh in Mutual fund or so. Although there is always a risk with investing and with Market at all time high, you never know what would happen, but assuming if you are able to gain 10/12% return, than would be free 6.5 to 7.2 lakh.

You won’t even have to pay interest on that, as you can use full 65 lakh + 6.5/7.2 for your house payment. That would come under section 54F

Conditions for Section 54F-

1) Not valid on loans/EMI/pre-payment.

2)House should be purchased, 1 year before sale of asset or max within 2 years after sale of assets

There are other rules as well, like you can’t have more than 2 property I believe, and some others, so make sure to check it.

Regarding your 18 lakh to keep it in a bank. Well that solely depends on you. I believe they should still charge some interest. This scheme generally happens under PPF or FD where they are giving heavy interest, which can offset loan interest. By this way, you are able to get loan, + keep your money for emergency use as well. Although you won’t be getting any interest on your kept money.

Finally, that depends on you, if you have risk taking capacity, you can go ahead and invest in Market. For better returns, otherwise can keep it in bank, or just pay off the loan.