What is this calculator?
The ultimate financial dilemma: You have ₹50 Lakhs invested and you want to buy a ₹50 Lakh asset. Should you liquidate your investments to buy it outright (debt-free), or should you take a loan at 8.5% and pay the EMI by withdrawing (SWP) from your 12% investment corpus? Let the math decide.
How is it calculated?
Simulates two parallel timelines: 1) Corpus depletion via SWP to pay EMI vs 2) Zero corpus but zero loan. Compares the final Net Worth at the end of the loan tenure.Frequently Asked Questions
- Does taking a loan at 8.5% make sense if my investments earn 12%?
- Usually yes, because of the 'interest rate arbitrage'. Your investments are compounding at a higher rate than your loan is depleting them. However, if the market crashes early in the tenure (Sequence of Returns Risk), the SWP will drain your corpus dangerously fast.
- How does tax affect this arbitrage?
- A home loan provides Section 24(b) tax deductions, effectively lowering your loan interest rate. Conversely, SWP withdrawals trigger capital gains tax. This calculator factors in both to give you the exact post-tax mathematical truth.
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Last reviewed: 6 June 2026