Home Loan + SWP Stress Test
Rs 80 Lakh Investment with Rs 80 Lakh Home Loan
Stress-test an Rs 80 lakh investment against an Rs 80 lakh home loan at 8% for 20 years, including EMI, return drag and market fall.
Direct answer
What happens when an Rs 80 lakh corpus funds an Rs 80 lakh home-loan EMI?
At 8% for 20 years, the loan EMI is about Rs 66,900 a month. An equal-sized investment corpus can support that withdrawal in favourable scenarios, but the investment is exposed to volatility while the loan payment remains due.
Worked example
With 12% gross return and 0.75% annual drag, the smooth model can end with money remaining. Change the first year to -20% to see why the same headline return assumption can produce a much weaker result.
What to check
- Include a realistic annual drag.
- Do not ignore floating-rate EMI or tenure changes.
- Keep stamp duty, emergency savings and purchase costs outside the corpus.
How the calculator approaches it
- 1.Calculate the reducing-balance home-loan EMI from principal, rate and tenure.
- 2.Treat that EMI as a monthly withdrawal from the investment corpus.
- 3.Apply return drag and compare a steady path with a bad-first-year path.
- 4.Check ending corpus and keep a separate liquid EMI reserve.
Important limitation
Market returns are variable, while the EMI is contractual. A 12% return is an assumption—not a promise—and an early market fall can damage an SWP plan even when the long-run average looks adequate.
Primary sources
Related questions
FAQs
What happens when an Rs 80 lakh corpus funds an Rs 80 lakh home-loan EMI?
At 8% for 20 years, the loan EMI is about Rs 66,900 a month. An equal-sized investment corpus can support that withdrawal in favourable scenarios, but the investment is exposed to volatility while the loan payment remains due.
Which calculator should I use for this question?
Use RupeeKit's Home Loan + SWP Stress Test India and replace the example with your own current figures.
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