"Housing for all by 2022" initiative has gained remarkable momentum with government's push for affordable housing with all possible subsidies including lower cost of housing loans. Banks cashing on the surplus liquidity in the system are constantly reducing costs across products and home loan category is no exception with other laws and provisions holding good for the sector as well as all stakeholders. Nonetheless, to service a high ticket size loan for a considerable long term in itself can reel out to be highly torturous at times.
So, to better prepare you plan your finances for meeting this long-duration liability, you shouldn't ignore investment in SIP. SIP or Systematic Investment Plan is known to better meet financial goals and with a planned and dedicated investment of small amount, investors in due course manage to gain enormously. With a fund manager assigned for every SIP, the company can be allocated either in debt or equity or a mix of both as per the risk profile and liquidity concerns of the investor.
SIP as per different web-aggregators have managed to offer a return of anyway between 12%-20% in the past 5 years. So, considering this return, you can successfully make your cost towards home loan i.e. EMI become absolutely free for you with a investment in SIP.
Let's understand this with an example: Suppose you in order to materialize your long-awaited desire of buying a house avail a housing loan @ 9.5% of Rs. 15,00,000 for a period of 20 years, interest and hence total repayment amount comes to be Rs, 33,55,673.
Now, suppose for the same tenure of 20 years, you begin an investment in SIP of Rs. 2000 with no default on payment, then you aggregate a principal amount of 2000*12*20 = Rs. 4,80,000 and if considering the present returns on SIP, your return is taken as average of 15%. You shall be in a good position to pay off your interest payments on home loans by the return generated from SIP.