Sir suppose i took home loan say 6,00,000 for 5 years at 8% interest rate and suppose i also invested same amount 6,00,000 in FD at 6% for 5 years & the result of this after 5 year i received more amount from FD than what i paid in home loan with interest, if ignore taxation.
So is it correct or i am missing something.
Kindly Explain
Hi, I am unable to understand how you would recieve more from the FD (where you earn 6%) compared to what you pay on your loan (8%)
You would basically have a net 2% outflow
Please add or elaborate if I am missing something.
Case I
There is loan of 6,00,000 @ 8% for 5 years and repaid in monthly installments so the monthly installments would be Rs. 12,165 so total outflow of fund at the end of 5th year is Rs. 7,30,000.
Case II
Similarly we invested in FD of Rs. 6,00,000 @ 6% for 5 year so at the maturity we will received cash flow of Rs. 8,02,950.
So under case I & II the interest rate remain the same but the principal amount in Case I reducing constantly & in case II the Invested amount increasing constantly so this may be the possibility.
Correct me if i am missing something (Ignore Taxation)