SIP + EMI Calculator
Monthly EMI: calculating…
About the SIP + EMI Strategy
20%
Recommended SIP as % of EMI
10–13%
Typical Equity SIP CAGR (10Y+)
8–9%
Typical Home Loan Interest Rate
Long-term
Strategy Works Best Over 15–20 Years
A home loan is one of the largest financial commitments you will make. While repaying it, disciplined investing — even a small fraction of your EMI — can help you build wealth in parallel. Over 15–20 years, the power of compounding in equity mutual funds can potentially offset a significant portion of the interest you pay on the loan.
Frequently Asked Questions
What does this SIP + EMI calculator show?
This calculator shows what happens when you invest a portion of your home loan EMI into a monthly SIP simultaneously. It computes your EMI from loan amount, tenure, and interest rate, then calculates the SIP corpus you can build over the same period. The key output is the comparison: total interest paid on your loan versus the wealth your SIP creates.
How is the EMI calculated in this calculator?
EMI is calculated using the standard reducing balance formula: EMI = P × r × (1+r)^n ÷ [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly instalments. This is the same formula used by all banks and housing finance companies in India.
Why should I invest a SIP while repaying a home loan?
Home loans typically carry 8–9% interest. Equity mutual funds have historically delivered 10–13% CAGR over 15+ year periods. If your SIP return exceeds your loan interest rate, the corpus built can offset — and potentially exceed — the interest you pay. Starting SIPs during the loan tenure also means you begin compounding early, which has a larger impact than delaying investment until the loan is fully repaid.
What is 'Net Wealth Created' in this calculator?
Net Wealth Created = SIP Corpus at Maturity − Total Interest Paid on the Loan. A positive number means your SIP earnings have more than compensated for the interest cost of your home loan. A negative number means the interest burden still exceeds your corpus — which is possible if your SIP percentage is small, the tenure is short, or the assumed SIP return is conservative.
What percentage of my EMI should I invest as a SIP?
A practical starting point is 15–20% of your EMI. For example, on a ₹50,000 EMI, that is ₹7,500–₹10,000 per month — an amount most borrowers can manage without straining their budget. Even 10% makes a meaningful difference over 20 years. The key is consistency: a small, sustained SIP outperforms a larger but irregular one.
Is it better to prepay the home loan or invest in SIP?
Both are valid strategies. Prepaying reduces your outstanding principal and saves on interest, guaranteed. SIPs offer potentially higher returns but carry market risk. A practical approach: if your home loan rate is below 8.5% (and you have a tax benefit under Section 24(b)), SIP is likely more efficient long-term. Above 9%, consider splitting — prepay a portion each year and continue SIP. Always factor in your Section 24(b) deduction (up to ₹2 lakh on interest) before deciding.
Ready to turn this into a real plan?
Artha Auto-Plan builds your complete financial roadmap — SIPs, insurance, emergency fund — personalised to your income and goals.
Disclaimer: Returns are not guaranteed or assured. The calculator's accuracy is not warranted. Before making any investment decisions, please seek advice from your financial advisors.
