Friday opinion, come at me.
Everyone treats prepaying the home loan like a moral obligation. for a lot of people i think the math says otherwise.
My reasoning:
- My loan’s at 7.7% floating
- A plain index fund has done roughly 11-12% over long stretches
- So every rupee i prepay ‘earns’ me a guaranteed 7.7%. the same rupee invested has historically earned more.
- And a home loan is the cheapest borrowing i’ll ever have access to. why rush to kill the cheapest debt i’ll ever get?
The counter i already know: prepaying is guaranteed and tax-free, equity is volatile and isn’t. fair. but over 15+ years the volatility smooths out.
So what am i actually missing? is it purely a sleep-at-night thing, or is there real math working against me here? roast away, i want to either be talked out of it or have it confirmed.