WFO - Should I make OD home loan(sbi maxgain) a...
Should I treat OD home loan(sbi maxgain) account as debt instruments?
I am going to take a home loan of 1 cr. Currently my equity mf investments are much more than that, but assuming xirr as 11%, it handily beats the home loan interest rate of 7.5% while giving me some additional tax benefits(until Tai removes the old scheme)
I have around 15l in liquid debt instruments.
I have another option to take sbi max gain loan at 7.75%. I am thinking to use this max gain as my debt instruments by taking additional loan of 15l(total 1.15cr) and keeping it in the OD account so I don't have to pay any interest on that. This will allow me to move my 15 lakhs from debt instrument to equity, but paying more interest.
I am somehow not able to model the maths mentally without pen and paper. Can someone help me on the maths and tell me which option is better assuming mf continue to give 11% xirr?
Option a : take normal loan on 1 cr and keep debt portfolio untouched, and redeem mf investment by 15 lacs
Option 2: take max gain loan(additional 25 basis points interest) for 1.15 cr and keep 15 lakhs permanently in account, and redeem 15 lakhs from debt instruments while keeping equity untouched
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