Borrowers with aggressive risk-profile: You seek new avenues to improve the overall yield of your portfolios. Hence you look for a minimum return of 15 per cent to 20 per cent per annum by investing your surplus into business, equities, mutual funds, properties and commodities. You should not panic and rush for the repayment as your earnings are higher than the home loan interest cost. Both the EMI and the tenure will go up in the short-run but will even out in the long-run. Verdict: Continue
High net worth borrowers: Your financial health is good. You look at floating rate loans as a cheaper and additional source of funds, which can be deployed at a much higher rate of return in the greener pastures. You are someone who should be least bothered about a hike in interest rates as you are comfortably placed and well covered for the home loan. For all we know, you have taken the home loan simply to take advantage of the tax benefits. Verdict:Continue
In short, as we can see there are different kinds of borrowers and depending on your profile, you should take the call on whether to close the loan, partially prepay or continue with the home loan.
