Dear Sir ,
I had taken a home loan of about 15 lakhs in 2014 for 20 years . I have few mutual fund investments which i had made between 2010 and 2015. Due to the current surge in the stock markets these investments have yielded handsome returns in the past one year . For the past few months i have been redeeming my investments periodically and using that to prepay my home loan. By this i have almost halved my home loan balance till now.
Am i doing the correct thing or not ? Please advice.
5 Answers
Hi,
May I know your other financial goals ??
Are you adequately saving/investing for these goals?
Related article :
https://www.relakhs.com/investing-mutual-funds-paying-home-loan/
I was investing basically for my retirement which is 19 yrs from now. I was feeling burdened with the load of home loan and wanted to be debt free as I am the only earning member in my family.I have some savings as a contingency fund. I was thinking that since the markets are quite expensive now I might as well redeem my profits and pay off the loan as much as possible instead of making further investments at these high levels.
Hi,
Ok. It is PERSONAL finance. There are thumb rules as such!
As you have been investing in Mutual funds since 2010, this shows that you are a long term investor and have the maturity levels to re-balance your portfolio.
Considering the low interest rate scenario, you may be better off to keep some loan balance as outstanding, claim tax benefits (if any) and also invest to certain extent for your Retirement goal.
May I know if you have adequate Life and Health cover?
I have HDFC click 2 protect term plan for a cover of 50 lakhs but no health insurance.
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