Abhibyakti Singh

Abhibyakti Singh

Executive Assistant, LXME

Recover Home loan interest with SIP

The desire to own a house is universal! Every woman dreams of having her own house that she can turn into a home! But, have you ever wondered how much interest is actually payable on a home loan? In this blog, we’ll discuss a method of recovering interest on home loan against SIP! 

How much do Home Loans really cost you?

While buying a home by taking a Home Loan may seem easy because of Equated monthly installments (EMI), many times women don’t realize just how much interest they are paying for a home loan. Let’s take an example to illustrate this:

Garima decides to buy her dream house in Chandigarh. To do this, she needs a loan of Rs. 50 Lakhs. She wants to repay this loan in the next 20 years. Upon calculation, she is informed that her interest rate payable will be 9% and her EMI will be Rs. 44, 986. She is delighted because this is within her budget and she can afford to make this monthly payment.

Now, let’s look a little closer!

If Garima’s loan amount = Rs. 50,00,000

Her interest rate = 9%

Tenure = 20 years

Then, her interest payable = Rs. 57,96,711 and her total repayment amount = Rs. 1,07,96,711!

This means that Garima’s interest payable is even higher than her loan amount! 

Is there a way to recover this amount? How to make home loan interest free

Luckily, by simply planning ahead and understanding the power of investing, women can recover this interest amount. The way to do this is through: Mutual Funds! And specifically through: SIP! Let’s look at an example of SIP Home Loan: 

In Garima’s example, she took a home loan of Rs. 50,00,000. Let’s assume that once she took the loan, she also decided to begin a monthly SIP of Rs.4,500 i.e. 10% of her EMI amount in a long-term mutual fund. She decides to do this for the next 20 years.

SIP Amount: Rs. 4,500

Expected Rate of Return: 14% p.a.*

*Mutual Funds are subject to market risk, read all scheme-related documents carefully.

Time Period: 20 years

The total value of her investment after 20 years will be Rs. 59,23,558.

As you can see, this amount can easily cover the sum paid out in the form of interest payments. In fact, it is more than the interest paid by Garima in 20 years!

You can check out LXME’s Long Term Plan which is diversified and expert-curated with an ERR of 14% and start investing through SIP!

What are the benefits of SIP?

As discussed above, we can recover the interest amount paid on Home Loans using SIP investment. Here are some other benefits of investing money online in Mutual Funds via SIP.


SIP is a convenient way to invest in mutual funds because women don’t need to time the market, instead money will be subtracted from their bank account at regular intervals and invested in the MF scheme they have chosen. 

You can check out LXME’s goal-based portfolios that are well-researched, diversified and curated by experts and start investing towards your goal with just 100!

Cost Averaging

With SIP, investments are made on a periodic basis and as a result, the cost of investments is averaged out. What this means is that when markets are down, you can buy more units of the fund with your monthly investment and when markets are up, you’ll be able to buy fewer units of the fund. This helps in managing market fluctuations.


SIP can help women diversify their portfolios. As the investment amount is small, they can invest in multiple funds and across different asset classes.

To sum up, this is how home loan against sip i.e.taking a disciplined approach to investing can help a woman recover her home loan interest amount gradually and easily. SIPs are a good way to bring discipline into the process of investing. They also lower the average cost of investing in mutual funds because of rupee cost averaging. 


How can I save interest on my housing loan?

You can recover interest on your home loan by investing in mutual funds through SIP. Simply, invest  10% of your EMI amount every month through SIP for the same time period as your home loan. Invest in a mutual fund with an expected rate of return of 12% or more. And allow the power of compounding to do its magic!

How much SIP should I do to recover my home loan interest?

A trick is to invest at least 10% of your EMI amount every month via SIP into Mutual Funds to recover your home loan interest.

Share this blog with your family and friends if you find it insightful!!Download the LXME app for more such content!

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