Is it a good idea to reduce home loan EMI over MF SIPs

Yes, it is a very good idea to repay your home loan as soon as you can irrespective of where the markets are now, high or low.

However, you need to check with your home loan provider if they will accept a higher monthly home loan repayment amount over the fixed monthly EMI. We think, you can repay your home loan principal amount (over and above your EMIs) only by a lump sum amount and not through monthly installments. In that case, you can invest the monthly surplus amount (after paying the current EMI of Rs 27,000) through SIPs in short term debt funds and once you are able to accumulate a sizable lump sum amount, you can repay the home loan amount. You can continue this over a period of time till the entire loan amount is paid.

You should not predict market levels whether it will be high or low post you have paid out the entire loan amount. Irrespective of where the markets are, you can start your SIPs anytime you have investible surpluses and continue them for the long term.

Hope you find our suggestions useful. Thanks for writing to Advisorkhoj.