Could a longer home loan actually leave you richer? The numbers may surprise you

Financial planner Kirtan Shah says home loan borrowers can cut interest costs and build wealth by opting for a longer tenure and investing the EMI savings.

In a LinkedIn post, Shah illustrated the strategy using a ₹50 lakh home loan taken in 2010 at 8.45% interest. Over 15 years, the EMI would have been ₹49,091, with total repayment of ₹88.36 lakh — including ₹38.36 lakh in interest.

Shah compared this with a 20-year loan, where the EMI drops to ₹43,233. The ₹5,857 saved each month, invested via a SIP in the Nifty 50 TRI, would have grown to ₹32.85 lakh over the same 15-year period.

After 15 years, the borrower in the 20-year scenario would have repaid ₹77.81 lakh to the bank — just ₹27.81 lakh in interest — but still owe ₹21.09 lakh in principal. 

The SIP corpus, however, would more than cover this. Paying off the balance would leave ₹11.75 lakh in surplus, and the loan would be closed five years early.

“By taking a higher tenure and investing the EMI difference, you can reduce interest burden and still create wealth,” Shah wrote. He added that those with existing loans could consider refinancing to a longer tenure and implementing the same approach.

The calculation assumes actual SIP returns of the Nifty 50 TRI from July 1, 2010, to June 30, 2025. Shah cautioned that past performance may not sustain and future returns are not guaranteed.