Home Loan Prepayment vs Investment Calculator
Compare the estimated impact of using extra money to prepay your Home Loan versus investing it for the remaining loan tenure.
₹30,00,000
Remaining Loan Tenure
₹1,00,000
This return is an assumption for illustration only. Market-linked returns are not guaranteed.
After Prepayment:
Current loan (no prepayment)
Prepay Home Loan
Based on current loan rate and assumed unchanged loan terms.
- Extra amount used
- ₹1,00,000
- Revised principal
- ₹29,00,000
- Current EMI
- ₹29,542
- New tenure
- 14 years 1 month
- Tenure reduced
- 11 months
- Estimated Interest Saving
- ₹2,43,048
- Total revised interest
- ₹20,74,546
Invest Instead
Illustrative. Market-linked returns are not guaranteed.
- Lump sum invested
- ₹1,00,000
- Assumed return
- 10% p.a.
- 5-year illustrative value
- ₹1,61,051
- 10-year illustrative value
- ₹2,59,374
- Value at remaining loan tenure
- ₹4,17,725
Where your ₹1,00,000 could lead
Investment values are illustrative.
What should you consider before deciding?
- Emergency Fund
- High-interest debt
- Remaining loan tenure
- Home Loan interest rate
- Investment time horizon
- Risk capacity
- Liquidity requirement
- Tax impact
- Financial goals
- Peace of mind
Before using your ₹1,00,000, check:
Do you have an Emergency Fund?
Do you have any high-interest debt such as Credit Card or Personal Loan?
Can you leave the investment untouched for the remaining loan tenure?
Would a temporary 20% fall in investment value make you withdraw?
How to read these results
Prepayment reduces principal immediately and can reduce future interest and/or tenure.
Investment keeps the Home Loan running while giving the extra money potential to grow, but returns are uncertain.
Liquidity — money used for Home Loan prepayment generally cannot be accessed easily again.
Risk — market-linked investment may fluctuate.
Frequently Asked Questions
Does this calculator tell me whether to prepay or invest?+
No. It only shows estimated loan-interest effects and illustrative investment values so you can compare two different kinds of outcomes. It does not recommend an option.
Why is interest saving not plotted on the same chart as investment value?+
Interest saving is a contractual loan cash-flow estimate. Investment value is an assumed future corpus. They are not equivalent, so they are shown separately.
What does Reduce Tenure vs Reduce EMI mean?+
Reduce Tenure keeps your current EMI and shortens the remaining period. Reduce EMI keeps the remaining period and recalculates a lower EMI after prepayment.
Related Calculators
This calculator is for financial education and illustration only. Home Loan calculations are estimates based on the inputs provided and assume the interest rate and loan terms remain unchanged unless stated otherwise. Investment returns are assumed and are not guaranteed. Actual loan savings, taxes and investment outcomes may differ. Consider your financial situation and seek qualified professional advice when required.