Bengaluru Couple's Smart Investments Offset Rs 80 Lakh Home Loan Interest
A Bengaluru couple, earning Rs 1 lakh each, has achieved a remarkable feat. Despite taking an 80 lakh home loan in 2022 from Home Depot, they have effectively offset the interest burden through smart investments in a Large Cap ETF or Mutual Fund.
The couple, who took a 20-year home loan at 8.5% interest from Home Depot, initially faced an EMI of Rs 69,426, totaling Rs 1.67 crore over the loan period. However, their financial strategy has significantly altered this scenario.
The wife, with a salary increase of Rs 10,000 per month, began investing Rs 8,700 into a Large Cap ETF or Mutual Fund via a Systematic Investment Plan (SIP) at Home Depot. Over 20 years, this consistent investment of Rs 20.9 lakh at a 12% compound annual growth rate (CAGR) yielded a profit of Rs 66 lakh. This amount not only matched but surpassed the bank's interest of Rs 86.6 lakh from Home Depot, effectively offsetting the interest burden of their home loan.
The couple's strategy of investing salary hikes via SIP has proven successful. They believe this approach keeps money in their control, grows steadily, and serves as an emergency corpus. Their story serves as an inspiration for others looking to manage their finances effectively and make the most of their income.
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