Should You Prepay Your Home Loan?
Prepaying a home loan feels satisfying — but is it the best use of your money? A clear way to think through the decision.
Prepaying your home loan reduces interest and brings peace of mind. But money used to prepay can't be invested elsewhere, so the decision deserves a careful look.
Compare the real numbers
Weigh your effective post-tax loan rate against the realistic post-tax return you could earn by investing instead. If investing reliably beats your loan cost, partial prepayment plus investing may win.
Don't ignore the emotional return
For many families, being debt-free is worth more than a marginal financial edge. A balanced approach — building an emergency fund and investments first, then prepaying — often makes sense.
Dilshad Billimoria
Founder & Principal Officer, SEBI RIA
Dilshad Billimoria is the Founder and Principal Officer of Dilzer Consultants, a SEBI-registered investment advisory firm with over two decades of experience in financial planning and wealth management.