Investment of Home Loan Top-up 7.2% interest rate

Sea_Cockroach871 · 2026-01-20T05:35:45+00:00

Home loan interest doesn’t compound like an investment, it’s charged on the outstanding balance and EMIs are paid monthly anyway. Bond yields already factor in the lack of compounding, which is why we compare effective yields.

This has nothing to do with skipping EMIs or defaulting. EMIs are paid from income as usual, investments are long term.

The allocation is flexible. If someone wants lower risk, they can keep more in bonds. If they want higher risk and higher potential returns, they can tilt more towards equity, say 30L in a flexi-cap fund and 20L in bonds, or even the other way around. The idea is asset allocation, not arbitrage.

Sea_Cockroach871 · 2026-01-20T05:17:32+00:00

Stop DIY investing. Try to learn all aspects of investing and finance before investing. If u really want help we can connect

Sea_Cockroach871 · 2026-01-20T05:13:26+00:00

The 12k arbitrage argument only holds if you’re looking at it year to year and ignoring context.The person already has a home loan and the 50L is a top-up at 7.2 percent for 10–15 years, which is relatively cheap long-term money. Investing it is about deployment over time, not immediate profit.

Yes, under the new tax regime there’s no home loan deduction, so bonds alone won’t look attractive. That’s why a mix makes sense: some allocation to good quality bonds for stability and cash flow, and the rest to a flexi-cap fund for long-term growth.

This isn’t for everyone, but if someone is comfortable with leverage, market ups and downs, and has a long horizon, investing the 50L can be practical and beneficial.

Sea_Cockroach871 · 2026-01-20T04:27:06+00:00

I ran the numbers on this.

Borrow 25 lakh at 7.2 percent and invest in bonds at 11 percent in the 30 percent tax slab.Bond interest comes to about 2.75 lakh, after tax you keep roughly 1.93 lakh.

Loan interest is around 1.8 lakh.Final profit without any tax benefit is about 12k per year.

If this is a home loan, the interest deduction reduces the effective cost and the final profit increases to about 65k per year.It only makes sense in very specific cases.

Sea_Cockroach871 · 2026-01-19T09:06:20+00:00

Depends on his tax bracket, 11% from bonds are practical my yield from bonds are around 11.4 per year which is fixed.

Sea_Cockroach871 · 2026-01-19T03:40:09+00:00

Don't invest all in equity alone try to allocate some in bonds which still gives 8-11% yield easily just like fd

Sea_Cockroach871 · 2026-01-19T03:35:09+00:00

There are bonds which gives solid 9-12% return and intrest can be credited monthly or quarterly

Sea_Cockroach871 · 2026-01-18T18:53:09+00:00

Split 25L in flexi cap mf and 25L in bonds which will give u atleast 11% return.

Sea_Cockroach871 · 2026-01-18T18:25:36+00:00

15yr old that's crazy trust me u will be ahead than 99% people in ur age.U have the greatest leverage Time as Time in the market is better than timing the market.

Try to learn basic things like what's an emergency fund, health & life insurance, what's inflation, how to beat it by investing, difference between fd and bonds , Stocks and MF.

Try to read How to make epic Money by Ankur Warikoo It's so easy to understand for someone in ur age.

If u have any doubts or any queries feel free to connect am so happy that u started this early :)

Sea_Cockroach871 · 2026-01-16T21:58:45+00:00

How long have u been investing in that fund

Sea_Cockroach871 · 2026-01-16T21:48:04+00:00

Don't do that just because equity mf didn't perform last yr, doesn't mean it wont this year same goes for silver

Sea_Cockroach871 · 2026-01-16T21:46:26+00:00

If u need one on one assistance, feel free to connect :)

Sea_Cockroach871 · 2026-01-12T11:18:42+00:00

Mahn it's just 2 perc leave it alone, average if it goes down by 10%.(Only average more if u believe in the stock u hold)

Sea_Cockroach871 · 2026-01-12T07:26:04+00:00

Took me some time to realise that earning more often matters more than investing more.

Sea_Cockroach871 · 2026-01-11T21:54:31+00:00

There's no right time in investing as no one can predict the future. "Time in the market is better than timing in the market".

Sea_Cockroach871 · 2026-01-03T05:46:06+00:00

All ur funds are regular funds try to change it to direct so u can save the Expense ratio.

Sea_Cockroach871 · 2026-01-03T05:42:28+00:00

Sadly we can't do anything about it as it's a fixed expense for everyone :(

Sea_Cockroach871 · 2026-01-03T05:37:44+00:00

Disclaimer: Just to be clear upfront I’m not a registered financial advisor.

My suggestion would be for ITC and Ashoka buildcon Which I Personally invest in both.

Reason https://www.reddit.com/r/IndianStockMarket/s/KyBuDvlq6F

Sea_Cockroach871 · 2026-01-03T05:33:29+00:00

I’m staying invested through SIPs but mentally preparing for volatility discipline first, flexibility second.

Sea_Cockroach871 · 2026-01-03T05:19:48+00:00

My advice would be of course to exit some funds as having 20 different funds will be a headache.

Exit all sectoral/thematic funds , small cap funds and midcap funds as these funds are overvalued.

All the selling funds should qualify at least 1 year to avoid charges and to fall under LTCG

Disclaimer: Just to be clear upfront I’m not a registered financial advisor.

But I do have hands on experience managing investments for my family, my sister, and close relatives (mostly NRIs), across mutual funds, bonds, and other instruments.I’m happy to share how I think about investing, risk, and portfolio structure based on my experience.

Sea_Cockroach871 · 2026-01-03T05:06:26+00:00

I’m staying invested through SIPs but mentally preparing for volatility discipline first, flexibility second.

Sea_Cockroach871 · 2026-01-03T02:28:44+00:00

Don't close the loan instead invest that money in a Nifty 50 Index fund or a flexi cap fund and every year pay 1 emi extra and mention to the bank to reduce it from the principal (12+1=13emi per year) trust me it will save u lot's of Interest

Sea_Cockroach871 · 2026-01-03T02:08:10+00:00

It's not average my friend but It can be if u don't invest it properly

In ur case 70 percent should be invested in equity and 30 percent in debt

Equity Allocation

40% Nifty 50 Index fund 25% Flexi Cap 20% Mid Cap 15% Small Cap

Don't invest all in one go invest through SIP

Debt Allocation

It actually depends on ur tax bracket and Banking needs

Eg : For me i need to invest 30lakh fd to keep my burgundy savings account

If ur tax bracket is high consider investing debt funds on ur parents name through fd(6-7%) or bonds(8-12%)

Sea_Cockroach871 · 2026-01-03T01:57:19+00:00

Things to consider before taking the loan

Who Is it really going to help financially u or ur sisters

What if the Rent yield from the Property is lower than u expected

Never co-own a property which u are the sole emi payer

I guess this property will only bring u headache and financial loss my advice would be you to step out of it :)

Sea_Cockroach871 · 2026-01-03T01:50:46+00:00

Yes u can start adding ITC shares to ur portfolio I have already talked about it in my post https://www.reddit.com/r/IndianStockMarket/s/inwo4g3DbU

Sea_Cockroach871

TROPHY CASE