Home Loan vs Mutual Fund

Read this first · How the cashflow mirror works

Both paths are sized to produce the same monthly disposable cashflow for living expenses. The house owner consumes the net rent they receive (rent − vacancy − maintenance). The MF investor withdraws an equivalent SWP from their fund every month to maintain identical lifestyle cash. In pre-rental years, when the house owner pays maintenance with no rent, the MF investor invests an equivalent extra-SIP for parity.

House net worth = property value − outstanding loan. Rent is consumed, not reinvested, which is why the "Cum Net Rent Received" column shows a simple sum and exactly matches "Cum SWP" at every year. The two are mirror images of the same monthly cashflow.

Property & Loan

Property Price (₹)

₹1Cr

Down Payment %

30%

Loan Interest Rate (annual)

8.5%

Loan Tenure (years)

20 yrs

Real Estate Frictions

Property Appreciation (annual)

Rental Yield (annual, gross)

3.0%

Rental Starts (year)

Yr 2

Stamp Duty + Registration (one-time %)

Maintenance + Property Tax (annual %)

0.8%

Vacancy + Brokerage Drag (% of rent)

10%

Rent & Maintenance Inflation (annual)

Rent and maintenance grow at this rate (independent of property appreciation).

Mutual Fund Settings

Expected Return (CAGR, post-TER)

11%

Use the CAGR you'd quote a client. NAV-based MF returns are already net of the fund's expense ratio.

LTCG % (both, on sale gains above ₹1.25L)

12.5%

Horizon (years)

20 yrs

Comparison held over the chosen horizon. Both sides marked-to-market at horizon end (capital gains paid).

🏠 House Cashflows

Down Payment (one-time)—

Stamp Duty + Registration—

Monthly EMI—

Monthly Rental (gross)—

Rental Starts—

Monthly Maintenance—

📈 MF Mirror Cashflows

Initial Lumpsum (= Down Payment)—

Monthly SIP (= EMI)—

Monthly SWP (= Net Rental)—

SWP Starts—

Expense Ratio Drag—

Stamp Duty Equivalent Invested—

House — Net Worth at Exit

—

Property value + rental reinvested − outstanding loan − taxes

Mutual Fund — Net Worth at Exit

—

Lump + SIP grown − SWP drawn − expense ratio − LTCG

Difference (MF − House)

—

Positive = MF wins

Property & Loan

Real Estate Frictions

Mutual Fund Settings

🏠 House Cashflows

📈 MF Mirror Cashflows

Verdict at 20-year horizon

Net Worth Over Time

Year-by-Year Comparison

Monthly Detail (first 60 months)

Cost & Cashflow Breakdown (over horizon)

See Also