I have around 30 Lakhs of savings in Govt as well as Private institutions which fetches me around 30,000 per month as interest. I don’t have any other loan. I am planning to buy a house worth around 75 lakhs by taking a loan of 40-45 lakhs and investing all the savings (30 Lakhs) by removing them from those places.
I can get a rent of 10,000 on that house. As a result, I have to pay around 40,000 as EMI towards the loan (In addition to loosing the 30,000 interests which I am getting presently). By deducting 10,000 rent which I will get, I will be paying/loosing 60,000 per month. Paying the EMI is not a problem for me. The house is in a good location and may be the price will be increased in the near future. But is it really good to take out all savings (there by loosing the interest) and take loan (there by paying 30,000) as EMI. Which one would be better in terms of money management. I wanted to take house loan to get some tax exemption also.