Is it ok to maximize the amount of home loan as it is cheap and invest my own money in MFs?

Transcript: The whole idea is to make sure that you are not contributing heavily out of your income. If 60% of your income goes towards paying the EMI, it's not a wise thing. If there's any uncertainty about your job, your mental framework changes. Psychologically, we are still extremely uncomfortable with the possibility of losing our house just because we lost our jobs. Of course, 8.6% is not a very expensive borrowing but by no yardstick, it is free money. Equity will be able to generate much more returns but it will come with a great deal of uncertainty. So, it's always good to be a little conservative with your borrowings. Make sure that your EMI is not going beyond a third of your income. That should keep things under control. Broadly, I agree with the idea that one should borrow as much as possible because the investment return will be higher than the cost you will incur on the home loan.

This article was originally published on May 22, 2017.