No Interest Home Loans? | Smart Investing & Borrowing Explained | Warikoo Hindi

Ever wondered if it's possible to pay no interest on your home loans? In this video, we explore how you can make your home loan effectively interest-free! We delve into the concept of a 'free home loan', where the interest you pay to the bank is offset by earnings from other sources.

We'll walk you through an Excel sheet that breaks down the math behind this concept. We discuss how you can leverage tax benefits provided by the Indian government on home loans to save money. We also explore how investing your savings wisely can help you earn money that can offset your loan interest.

Remember, the key to making this work is to take a smaller loan than the maximum you're eligible for, and invest the money you save. This strategy is why many wealthy individuals opt to take home loans, even when they could afford to buy a home outright.

Join us as we unravel the secrets to making your home loan work for you. Don't forget to like, share, and subscribe for more financial insights!

#homeloan #warikoo #personalfinance

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[vishwast]

1) take maximum loan : 37, 50, 000
2) The extra 5 lakh amount which was planned to invest to decrease loan amount,   instead of that you do 5 lakh lumpsum amount in an index fund (12% return)
which over 25 years will become 85, 00, 000
3) Interest paid over 25 years 49, 32, 932
4) Total amount saved on tax 13, 89, 905
5) Total amount saved over 25 years
is 49, 56, 973 ( if return of 10% is applied ) then amount saved would be around 20, 00, 000
6) Here there WILL BE NO ACTIVE RESPONSIBILITY OF US INVESTING EXTRA amount monthly

[dilipkumar-hxzg]

Actually it is not much practical except for rich people
But this video can force you think through another prospect 🙏🙏

[Rn]

Life doesn't work based excel sheet calculations. The only reason why home loan is beneficial is that the emi doesn't increase with years and if the interest rate is 8-9%, you need to discount the inflation of 6.5%. you are literally paying only 2-3% more which gets discounted by the tax benefits

[rohitdey]

I feel rather than keeping the loan for long tenure and investing, its better to prepay on monthly basis and close the loan in 8 years. Then you are mentally and financially more stable to invest big amounts in rest of the year.

[romitchhabra]

Instead of taking a lesser loan (5.5 lacs shown in the video) and then investing the saved EMI amount @10% and earning 56 lac after 25 years, if we directly invest that 5.5 lacs @10% for 25 years, the amount accumulated will be 65 lacs (can check in any FD calculator online by entering these numbers), 9 lacs higher than the strategy shown in the video. Also with a higher loan amount, tax savings will also be higher.
Hence as long as the expected ROI of investment is more than the home loan, the home loan should be maximized according to maths. Not considering psychological & behavioral factors.

[SandyKool]

Thanks for sharing your knowledge. Always helpful!

[angshuman.kashyap]

If someone is able to consistently generate higher returns than the interest rate charged by the bank, it makes complete sense to minimize the downpayment and invest that money which will eventually generate returns greater than the interest charged by the bank. Also, higher loan in India might result in more tax savings on the loan interest for more number of years.

The only way this video would make sense is when interest rates are currently very high and you don't know where to invest to beat that interest rate and minimize the risk on future EMIs.

[priteshmalani]

10% returns is not conservative returns but actually quite nice.
Don't judge returns based on last 3 years of market ralley.

[avishekdas]

I would beg to differ on this. For every scenario mentioned here, please do a lumpsum mutual fund investment calculator. For e.g. 2.5 Lacs invested over 25 years with 10% ROI will yield more. So if you have 2.5 lacs more just invest it then and there. Don't wait for SIPs.

[siddiquisherry]

This is theoretically good but practically its quite difficult to achieve but one must approach it like that. Thanks Ankur

[rushikeshmahajan]

I was thinking of this idea before but i was not sure about calculation part, finally you made a video of out it! Thanks Ankur bhaiya!

[vijaykumarkaushik]

@warikoo
1. In the example of 1Cr House Value, where EMI comes out to be 91K considering taking loan of 75lacs, you still kept the Tax slab of 20%. If any person is able to give such suge EMI, then how he will still fall in 20% bracket.
2. Also as we seen in the last budget, new regime of tax is sort of promoted by the govt, so what is the guarantee of having tax benefits for the whole duration of the loan, that you have just mentioned here.
3. Also this approach of taking less loan can also be used in another way. If instead of investing that extra savings in EMI amount, we directly invest the sum total amount of that we decided to pay upfront as downpayment, wont it give better returns in that long durations?

[hritiknachankar]

@warikoo Can you please make a similar Excel sheet video on Educational Loan ?? It will be really of help for us.

[vivekkoul]

This is a very brilliant video ankur, thanks for posting

[bishalkumarshaw]

Wow, amazing video. Aaj kuchh naya sikha. Thank you so much sir ❤❤🙏😊

[shantanujoshi]

@warikoo
1) Saving no 1 - no taxation on 1.5 lkh (principal paid ) + 2.5 lkh (interest paid)
But till 15 year principal amount is under 1.5 lkh and after 9th year interest amount paid drops below 2.5 lkh -- considering all these 14 lkh might not be saved.

2) What about taxation on profit earned on invested amount?
That is not taken into consideration!!

Let me know if my understanding is correct?

[jayvirrathi]

hi Ankur,

your above calcualtions are on paper doesn't work that way in real life.
because u have not factored main component ie home loan interest is mostly floating interest not fixed interest.
you already have 2-3 or more videos based on similar calculations.

suggestion: pls make a proper video taking into consideration floating home loan interest

FYI: life doesn't work that way as you show in Excel.

[harshatheprinceno]

Very good stratefy Ankur. Only catch here is, one should have sufficient amt for the down/balance payment. Those who have funds shd definitely go for this strategy...!!!

[reshmamandavkar]

Super 👌 Salute to your mathematical analysis