FliberInvestment Advisors · SEBI Registered Investment Adviser

Home Loan — EMI Composition & Prepay vs. Invest

See how your EMI splits between interest and principal over the life of the loan, and whether a lump sum is better used to prepay the loan or invested in the market instead.

Loan

Outstanding loan principal (₹)50,00,000

Interest rate (% p.a.)8.5%

Remaining tenure (years)15

Lump Sum

Amount available (₹)10,00,000

Prepayment charges (%)0%

RBI has waived foreclosure/prepayment charges on floating-rate loans to individual borrowers, so 0% is the right default for most home loans. Fixed-rate loans may still carry a charge — adjust if relevant.

Taxation

Alternative Investment

Expected market return (% p.a.)10%

This is the return the lump sum — or whatever cash a prepayment frees up — is assumed to earn if invested in the market instead of used against the loan.

EMI composition over time

How each year's EMI splits between interest and principal, assuming no prepayment — early years are interest-heavy, later years are principal-heavy.

Wealth outcome: invest vs. prepay

Ending wealth from the lump sum (and whatever cash a prepayment frees up along the way), compounded to the end of the original remaining tenure.

Year-by-year detail

Year-by-year detail