I was wondering if I have some cash in-hand which pays me an interest component that can pay off the home in 8 years, I invest in a property in country like India where I get 6% (at least as of today) as rate of return per year, is it smart to fixed deposit the money and pay mortgage through interest income?

Worst case I have the money as FD and I can pay off the loan in total by breaking the FD. I do understand that it is stupid to pay interest for the loan I am taking for buying the property, but heck with it if I lose one more year or may be 2 years worth of interest income from the fixed deposit. I do not have to pay a penny from my pocket and the property gets paid by the interest from FD deposit right?

Is there something off that you see with this approach?

  • How do you get 6% off of a property in India? Is that the current appreciation rate? How constant do you think that will be over time?
    – D Stanley
    Jan 26, 2018 at 19:58
  • 1
    Assuming that the investment in India is not risk-free (meaning the returns can vary) the linked duplicate (and several related questions) should give you what is usually the majority opinion on this site - that funding risky investments with debt is generally a bad idea, unless the difference in return significantly overcomes the difference in risk.
    – D Stanley
    Jan 26, 2018 at 20:22
  • @d stanley 6% interest rate on fd investments not on the property
    – rao
    Jan 26, 2018 at 22:58


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