Buying a Rs 50 lakh home? Your home loan could cost Rs 83 lakh. Bengaluru CA shares a simple financial strategy to beat the interest

Buying a home is often considered one of life's biggest financial milestones. But while most buyers focus on arranging the down payment and managing the monthly EMI, many overlook the long-term cost of borrowing. Interest paid over two decades can quietly add tens of lakhs to the property's price. Bengaluru-based chartered accountant Meenal Goel recently highlighted this hidden cost and shared a simple investing strategy that, according to her, could help homeowners reduce its financial impact over time.

Bengaluru CA Meenal Goel took to social media to explain that the actual cost of buying a house can be significantly higher than its listed price because of home loan interest. Using a practical example, she showed how investing alongside a home loan could help build wealth while repaying the loan.

According to Goel, consider a house priced at Rs 50 lakh. If the buyer makes a down payment of Rs 10 lakh, the remaining Rs 40 lakh is financed through a home loan at an interest rate of 8.5 per cent for 20 years. In this example, the monthly EMI comes to around Rs 34,700. However, the biggest surprise lies in the total interest paid over the loan tenure. Goel pointed out that over 20 years, the borrower would pay approximately Rs 43.31 lakh in interest alone.



That means the overall cost of purchasing the Rs 50 lakh house rises to nearly Rs 83 lakh after accounting for the interest paid to the lender.

View this post on Instagram

A post shared by Meenal Goel | Finance (@ca.meenalgoel)

How to beat the home loan interest?

To help offset this additional cost, Goel suggested starting a Systematic Investment Plan alongside the monthly EMI instead of focusing only on loan repayments. In her example, she recommended investing Rs 6,000 every month into index funds throughout the 20-year loan tenure.

Explaining why she prefers index funds, Goel noted that they are passive investment vehicles designed to track market indices such as the NIFTY 50 or the Sensex. She added that these funds offer diversification by investing in some of India's largest companies, including TCS, HDFC Bank, Infosys and Reliance Industries. They also carry relatively low costs and have historically delivered strong long-term returns.


Using an assumed annual return of around 14 per cent, Goel estimated that investing Rs 6,000 every month for 20 years would produce impressive results. Over that period, the total amount invested through the SIP would be around Rs 14 lakh. According to her calculations, the investment could grow to approximately Rs 79 lakh after two decades.


Even after accounting for both the invested amount and the Rs 43.31 lakh paid as home loan interest, Goel estimated that the investor would still be left with a net financial gain of around Rs 21.69 lakh. Her broader message was that borrowers should think beyond simply paying their EMIs every month. While loan repayments are unavoidable, investing consistently alongside the home loan allows money to grow through compounding and can help soften the long-term impact of interest costs.

As Goel summed up in her post, instead of only paying EMIs, borrowers should "invest smartly" and allow their money to grow over time, turning a necessary financial obligation into an opportunity for long-term wealth creation.