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Home Loan vs Cash Purchase

Wealth comparison after the same period.

Property Value (₹)

Down Payment (₹)

Loan Rate (%/yr)

Tenure (years)

Alt. Investment Return (%/yr)

Annual Tax Benefit (₹)

Take Loan + Invest

Better

₹5,25,81,104

EMI: ₹52,069/mo

Total interest: ₹64,96,655

Tax saved: ₹12,00,000

Investment FV (loan amount upfront): ₹5,78,77,759

All Cash + SIP equivalent

₹5,20,25,027

No loan, no interest, no tax benefit

SIP equal to would-be EMI: ₹5,20,25,027

Verdict

Loan + Invest wins

By ₹5,56,077

If alt. investment return > (loan rate − tax savings), loan + invest typically beats all-cash. But this assumes discipline to actually invest the freed cash. Cash purchase eliminates default risk and gives mental peace.

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