Home Loan SIP Calculator 2026
Find the monthly SIP that could earn back the interest you pay on your home loan.
New
The idea: Pay your EMI as usual and, alongside it, run a SIP of the calculated amount in equity mutual funds. If the fund earns the return you entered, by the end of the loan the SIP will have grown to at least the total interest you paid. You still pay the bank every rupee of interest; the SIP only earns it back. It is investing alongside the EMI, not a replacement for it.
Home Loan
50000050000000
%
6%15%
Yrs
5 Yr30 Yrs
- Monthly EMI
- ₹43,391
- Principal (loan amount)
- ₹50.00 L
- Interest paid to bank
- ₹54.14 L
- Total payment over 20 years
- ₹1.04 Cr
Parallel Investment (SIP)
Offset strategy
Smaller monthly SIP. Full SIP corpus (invested + returns) cancels out the loan interest.
%
Equity mutual funds in India have averaged 11–14% over long horizons. We default to 12% (conservative-realistic). Tenure is locked to your loan tenure.
6%20%
- Net cost of loan after SIP offset
- ₹49.19 L
- Your SIP corpus (₹54.95 L) fully offsets the ₹54.14 L of interest paid. You also keep ₹81,373 of surplus wealth on top of owning the house.
- To cover this loan's interest with a SIP, invest:
- ₹5,500/month
- Amount invested (240 months)
- ₹13.20 L
- Amount earned (returns)
- ₹41.75 L
- Total value at year 20
- ₹54.95 L
- Combined monthly outflow
- ₹48,891
- EMI + SIP. This is what you commit per month for the strategy to work.
Home Loan breakdown
- Principal
- ₹50.00 L
- Interest
- ₹54.14 L
SIP investment breakdown
- SIP invested
- ₹13.20 L
- Returns
- ₹41.75 L
Combined view
- Principal (your house)
- ₹50.00 L
- Interest offset by SIP
- ₹54.14 L
- SIP surplus (extra wealth)
- ₹81,373
Year-by-year: Loan vs SIP
Show as
- Y1
- Principal paid
- ₹99,509
- Interest paid
- ₹4.21 L
- Loan balance
- ₹49.00 L
- SIP invested
- ₹66,000
- SIP interest earned
- ₹4,451
- SIP total value
- ₹70,451
- Y2
- Principal paid
- ₹1.08 L
- Interest paid
- ₹4.12 L
- Loan balance
- ₹47.92 L
- SIP invested
- ₹1.32 L
- SIP interest earned
- ₹17,838
- SIP total value
- ₹1.50 L
- Y3
- Principal paid
- ₹1.18 L
- Interest paid
- ₹4.03 L
- Loan balance
- ₹46.74 L
- SIP invested
- ₹1.98 L
- SIP interest earned
- ₹41,292
- SIP total value
- ₹2.39 L
- Y4
- Principal paid
- ₹1.28 L
- Interest paid
- ₹3.92 L
- Loan balance
- ₹45.46 L
- SIP invested
- ₹2.64 L
- SIP interest earned
- ₹76,092
- SIP total value
- ₹3.40 L
- Y5
- Principal paid
- ₹1.40 L
- Interest paid
- ₹3.81 L
- Loan balance
- ₹44.06 L
- SIP invested
- ₹3.30 L
- SIP interest earned
- ₹1.24 L
- SIP total value
- ₹4.54 L
- Y6
- Principal paid
- ₹1.52 L
- Interest paid
- ₹3.69 L
- Loan balance
- ₹42.54 L
- SIP invested
- ₹3.96 L
- SIP interest earned
- ₹1.86 L
- SIP total value
- ₹5.82 L
- Y7
- Principal paid
- ₹1.65 L
- Interest paid
- ₹3.55 L
- Loan balance
- ₹40.89 L
- SIP invested
- ₹4.62 L
- SIP interest earned
- ₹2.64 L
- SIP total value
- ₹7.26 L
- Y8
- Principal paid
- ₹1.80 L
- Interest paid
- ₹3.41 L
- Loan balance
- ₹39.09 L
- SIP invested
- ₹5.28 L
- SIP interest earned
- ₹3.60 L
- SIP total value
- ₹8.88 L
- Y9
- Principal paid
- ₹1.96 L
- Interest paid
- ₹3.25 L
- Loan balance
- ₹37.13 L
- SIP invested
- ₹5.94 L
- SIP interest earned
- ₹4.78 L
- SIP total value
- ₹10.72 L
- Y10
- Principal paid
- ₹2.13 L
- Interest paid
- ₹3.07 L
- Loan balance
- ₹35.00 L
- SIP invested
- ₹6.60 L
- SIP interest earned
- ₹6.18 L
- SIP total value
- ₹12.78 L
- Y11
- Principal paid
- ₹2.32 L
- Interest paid
- ₹2.89 L
- Loan balance
- ₹32.68 L
- SIP invested
- ₹7.26 L
- SIP interest earned
- ₹7.84 L
- SIP total value
- ₹15.10 L
- Y12
- Principal paid
- ₹2.53 L
- Interest paid
- ₹2.68 L
- Loan balance
- ₹30.15 L
- SIP invested
- ₹7.92 L
- SIP interest earned
- ₹9.80 L
- SIP total value
- ₹17.72 L
- Y13
- Principal paid
- ₹2.75 L
- Interest paid
- ₹2.46 L
- Loan balance
- ₹27.40 L
- SIP invested
- ₹8.58 L
- SIP interest earned
- ₹12.10 L
- SIP total value
- ₹20.68 L
- Y14
- Principal paid
- ₹2.99 L
- Interest paid
- ₹2.21 L
- Loan balance
- ₹24.41 L
- SIP invested
- ₹9.24 L
- SIP interest earned
- ₹14.76 L
- SIP total value
- ₹24.00 L
- Y15
- Principal paid
- ₹3.26 L
- Interest paid
- ₹1.95 L
- Loan balance
- ₹21.15 L
- SIP invested
- ₹9.90 L
- SIP interest earned
- ₹17.85 L
- SIP total value
- ₹27.75 L
- Y16
- Principal paid
- ₹3.55 L
- Interest paid
- ₹1.66 L
- Loan balance
- ₹17.60 L
- SIP invested
- ₹10.56 L
- SIP interest earned
- ₹21.42 L
- SIP total value
- ₹31.98 L
- Y17
- Principal paid
- ₹3.86 L
- Interest paid
- ₹1.35 L
- Loan balance
- ₹13.75 L
- SIP invested
- ₹11.22 L
- SIP interest earned
- ₹25.52 L
- SIP total value
- ₹36.74 L
- Y18
- Principal paid
- ₹4.20 L
- Interest paid
- ₹1.01 L
- Loan balance
- ₹9.55 L
- SIP invested
- ₹11.88 L
- SIP interest earned
- ₹30.22 L
- SIP total value
- ₹42.10 L
- Y19
- Principal paid
- ₹4.57 L
- Interest paid
- ₹63,612
- Loan balance
- ₹4.98 L
- SIP invested
- ₹12.54 L
- SIP interest earned
- ₹35.60 L
- SIP total value
- ₹48.14 L
- Y20
- Principal paid
- ₹4.98 L
- Interest paid
- ₹23,210
- Loan balance
- ₹0
- SIP invested
- ₹13.20 L
- SIP interest earned
- ₹41.75 L
- SIP total value
- ₹54.95 L
| Year | Principal paid | Interest paid | Loan balance | SIP invested | SIP interest earned | SIP total value |
|---|---|---|---|---|---|---|
| Y1 | ₹99,509 | ₹4.21 L | ₹49.00 L | ₹66,000 | ₹4,451 | ₹70,451 |
| Y2 | ₹1.08 L | ₹4.12 L | ₹47.92 L | ₹1.32 L | ₹17,838 | ₹1.50 L |
| Y3 | ₹1.18 L | ₹4.03 L | ₹46.74 L | ₹1.98 L | ₹41,292 | ₹2.39 L |
| Y4 | ₹1.28 L | ₹3.92 L | ₹45.46 L | ₹2.64 L | ₹76,092 | ₹3.40 L |
| Y5 | ₹1.40 L | ₹3.81 L | ₹44.06 L | ₹3.30 L | ₹1.24 L | ₹4.54 L |
| Y6 | ₹1.52 L | ₹3.69 L | ₹42.54 L | ₹3.96 L | ₹1.86 L | ₹5.82 L |
| Y7 | ₹1.65 L | ₹3.55 L | ₹40.89 L | ₹4.62 L | ₹2.64 L | ₹7.26 L |
| Y8 | ₹1.80 L | ₹3.41 L | ₹39.09 L | ₹5.28 L | ₹3.60 L | ₹8.88 L |
| Y9 | ₹1.96 L | ₹3.25 L | ₹37.13 L | ₹5.94 L | ₹4.78 L | ₹10.72 L |
| Y10 | ₹2.13 L | ₹3.07 L | ₹35.00 L | ₹6.60 L | ₹6.18 L | ₹12.78 L |
| Y11 | ₹2.32 L | ₹2.89 L | ₹32.68 L | ₹7.26 L | ₹7.84 L | ₹15.10 L |
| Y12 | ₹2.53 L | ₹2.68 L | ₹30.15 L | ₹7.92 L | ₹9.80 L | ₹17.72 L |
| Y13 | ₹2.75 L | ₹2.46 L | ₹27.40 L | ₹8.58 L | ₹12.10 L | ₹20.68 L |
| Y14 | ₹2.99 L | ₹2.21 L | ₹24.41 L | ₹9.24 L | ₹14.76 L | ₹24.00 L |
| Y15 | ₹3.26 L | ₹1.95 L | ₹21.15 L | ₹9.90 L | ₹17.85 L | ₹27.75 L |
| Y16 | ₹3.55 L | ₹1.66 L | ₹17.60 L | ₹10.56 L | ₹21.42 L | ₹31.98 L |
| Y17 | ₹3.86 L | ₹1.35 L | ₹13.75 L | ₹11.22 L | ₹25.52 L | ₹36.74 L |
| Y18 | ₹4.20 L | ₹1.01 L | ₹9.55 L | ₹11.88 L | ₹30.22 L | ₹42.10 L |
| Y19 | ₹4.57 L | ₹63,612 | ₹4.98 L | ₹12.54 L | ₹35.60 L | ₹48.14 L |
| Y20 | ₹4.98 L | ₹23,210 | ₹0 | ₹13.20 L | ₹41.75 L | ₹54.95 L |
Loan balance vs SIP value over time
Formula
Standard Formula
S = I / F, F = [(1 + r)^n − 1] / r × (1 + r)
Live Calculation (Plugging Your Values)
Total Interest Paid to Bank (I):₹54.14 L
Monthly expected return (r):1.000%
Total months (n):240
SIP growth factor (F):999.15
Required Monthly SIP (S):₹5,500
Substituted Equation:
S = ₹54.14 L / 999.15 = ₹5,419 → ₹5,500
Required Monthly SIP:₹5,500/month
The required SIP is rounded up to the next ₹100. In interest-offset mode, F − n leaves only the returns part of the SIP corpus, so your invested principal is not counted towards the interest.
📖 In-Depth Financial Guide11 min read
How to Recover Home Loan Interest with SIP (and When It Fails)
SIP to recover home loan interest: ₹5,500 a month on ₹50L, ₹10,900 on ₹1 crore (8.5%, 20 years, 12% return). Table from ₹25L to ₹1.5Cr, plus the 8% case.
About the Home Loan SIP Calculator
This home loan SIP calculator tells you how much to invest each month to recover the interest you pay on your home loan. A typical ₹50 lakh home loan at 8.5% over 20 years has you pay roughly the same amount in interest as in principal — about ₹54 lakh of interest on top of the ₹50 lakh principal. That feels brutal. But there's a powerful counter-strategy: while you pay your EMI, simultaneously SIP a smaller amount each month into equity mutual funds at long-term equity returns (~12% historical average). Over 20 years, that SIP corpus typically grows large enough to fully offset the interest you paid the bank.
In plain terms you are borrowing at about 8.5% and investing in equity you hope returns about 12%. This is leverage, not arbitrage — the equity return is uncertain while the interest is not. The 3.5% spread, compounded over 20 years on a growing SIP corpus, often exceeds the absolute interest cost on a fixed-principal loan.
Key insight: this is parallel investing, not refinancing. You still pay full EMI to your bank. The SIP is an additional commitment that uses the rest of your monthly cashflow to build wealth.
How it Works
- Loan amount — your home loan principal.
- Loan interest rate — today's home loan rates in India range 8.0%–9.5%.
- Loan tenure — typically 15–25 years. The SIP runs for the same period.
- Expected SIP return — historical equity MF average is 11–14%. We default to 12%.
Two strategies — pick your aggression level
- Total value offsets interest (default, simpler) — you pick a smaller monthly SIP whose entire corpus at year N (invested + returns) cancels out the loan interest. Net cost of loan ≈ principal only. The SIP principal you put in is consumed in offsetting the interest.
- Returns alone offset interest (aggressive) — you pick a larger monthly SIP so that just the returns cover the loan interest. Your invested principal stays intact and is yours to keep as bonus wealth on top of the house. Requires a higher combined monthly outflow.
Use mode #1 if cash flow is tight; mode #2 if you have room to invest more and want to come out the other side of the loan with both the house and a large nest egg.
Important caveats
- Returns aren't guaranteed. Equity returns are volatile. Plan for 8% as a downside scenario; consider 14% an upside.
- You need extra cash flow. The SIP is over and above your EMI — make sure the combined outflow fits your budget.
- Discipline is non-negotiable. Skipping SIPs in down markets defeats the strategy.
- Tax matters. On the new regime — the default — a self-occupied house gets no Section 24(b) deduction at all; the ₹2 lakh relief exists only on the old regime. Equity LTCG is 12.5% on gains above ₹1.25 lakh a year, so the SIP corpus is worth less after tax than the headline figure.
- Don't redirect your EMI. Default on the loan and you lose the house. SIP is a separate commitment.
Why it works (the gap)
Your loan interest compounds on a shrinking balance (you pay down principal each month). Your SIP compounds on a growing balance (each contribution adds to the base). That asymmetry is why a 12% SIP can outweigh an 8.5% loan even though the rate gap is only 3.5%. The longer the tenure, the more the SIP corpus pulls ahead.
Benefits of the parallel SIP strategy
- Build a wealth corpus while paying off your home — don't choose, do both.
- Forces disciplined saving without sacrificing the home purchase.
- At loan maturity you own the house and have a sizable mutual fund corpus.
- If markets do well, you can prepay the loan from the SIP corpus and shorten the tenure dramatically.
- Provides liquidity — unlike home equity, the SIP corpus is accessible if you face an emergency.
Related calculators
- Home Loan EMI Calculator — basic EMI breakdown.
- SIP Calculator — pure SIP returns.
- Home Loan Eligibility — find out the loan you qualify for.
- Inflation Calculator — see real cost of loan in today's rupees.
References
Home Loan SIP and Interest Recovery FAQs
Is the home loan actually interest-free?
No. You pay the bank every rupee of interest the loan schedule says you owe. What this strategy does is run a separate equity SIP alongside the EMI in the hope that, after 15 to 20 years, the corpus it builds is larger than the interest you paid. The loan is not cheaper; you have simply put money into a second asset. Calling it "interest-free" is a way of describing the end result if equity cooperates — it is not a feature of the loan.
How much SIP do I need to recover my home loan interest?
On a ₹50 lakh loan at 8.5% for 20 years, the EMI is ₹43,391 and the total interest is about ₹54.1 lakh. At a 12% return, a monthly SIP of ₹5,500 (about 13% of the EMI) builds a corpus equal to that interest by the last EMI. If you want the SIP's returns alone to cover the interest, leaving about ₹17.8 lakh over as extra wealth, you need ₹7,200 a month. The amount scales with the loan: about ₹1,100 a month for every ₹10 lakh borrowed at the same rate and tenure. At a 10% return the ₹50 lakh figure rises to ₹7,100, and at 8% to ₹9,200. These figures are before tax on the SIP's gains.
What is this strategy really doing?
You are keeping a loan at 8.5% while investing in equity that you hope returns more than that. That is borrowing to invest, and it works only while the return beats the borrowing cost. Over 15 to 20 years Indian equity has usually done that, which is why the idea is popular. But the gap is not guaranteed, and unlike the loan — where the interest is fixed and certain — the investment side is not. Understand it as leverage, not as a trick that cancels interest.
What happens if equity returns 8% instead of 12%?
The strategy falls well short. On a ₹50 lakh loan at 8.5% over 20 years you pay about ₹54 lakh in interest. A SIP sized to reach that at 12% will only build roughly half of it at 8%, leaving a large gap you still owe. Because the shortfall depends on returns you cannot control, treat 12% as a hopeful case and check what the plan looks like at 8% before committing. The calculator lets you set the return, so run the pessimistic number too.
Is this the same as an offset or MaxGain home loan?
No, and the difference matters. In a genuine offset loan such as SBI MaxGain or Bank of Baroda Home Loan Advantage, money parked in a linked current account is subtracted from the outstanding balance before interest is calculated, so it directly reduces the interest you pay and stays withdrawable. This strategy does nothing to your loan balance. Your SIP is a separate investment that rises and falls on its own; the bank charges the same interest either way.
Why not just prepay the loan instead?
Prepaying gives you a certain, tax-free return equal to your loan rate — 8.5% guaranteed, with no market risk and no sequence risk. The SIP route might beat that, but might not. Prepaying also cuts your obligation, while this strategy keeps the full debt on your books for 20 years. A reasonable middle path is to prepay enough to sleep well and invest the rest. If your loan is at 9.5% or more, prepaying is usually the better deal.
How do I balance a home loan EMI and SIP investments?
Treat the EMI as the fixed part and the SIP as the flexible part. The EMI is a contract: a missed one attracts penal charges and is reported to the credit bureaus. A SIP can be paused, cut or raised without any penalty from the fund house. So commit to the EMI first, keep an emergency fund, and size the SIP from what is left. On a ₹50 lakh loan at 8.5% over 20 years, the EMI plus the ₹5,500 SIP that recovers the interest at 12% comes to ₹48,891 a month. If that total is a stretch, start with a smaller SIP and raise it as your income grows, or put spare money into prepayment instead: prepaying earns your loan rate with certainty, while the SIP's return is not guaranteed.
Do I pay tax when I redeem the SIP corpus at the end?
Yes, and it eats into the offset. Equity held over 12 months is taxed at 12.5% on long-term gains above ₹1,25,000 a year. On a ₹50 lakh loan the SIP that offsets the interest contributes about ₹13 lakh over 20 years and ends near ₹54 lakh, so roughly ₹41 lakh is gain and the tax runs to about ₹5 lakh. Redeeming in staggered tranches across financial years uses the ₹1.25 lakh exemption more than once. Compare against the interest paid after this tax, not before.
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📖 In-Depth Financial Guide10 min read
How to Recover Home Loan Interest with SIP (and When It Fails)
SIP to recover home loan interest: ₹5,500 a month on ₹50L, ₹10,900 on ₹1 crore (8.5%, 20 years, 12% return). Table from ₹25L to ₹1.5Cr, plus the 8% case.