I would like to know the catch in this variant of home Loans. There are a few queries which come to my mind which I would like clarifications on : 1. Why would anyone like to go for a 10 lac loan if he has around 4-5 lacs savings. Is there a benefit ? 2. You/banks claim that the interest outgo is reduced by depositing our excess savings money in this so called home loan account. What about the fact that I would lose the interest on this extra savings had I invested the money in other avenues like Fixed Deposits etc. 3. If the interest component is reduced using this home loan variant by depositing excess savings in the account, will it mean that my annual interest component paid goes down and that I lose out on the tax benefits as against the projected annual figures? Please clarify this part. 4. I can only see that flexibility is the only benefit that this variant offers. i.e. we can withdraw our excess deposit whenever we want as its just like a savings account. Beyond that I think that banks are taking customers for a ride when they say that we actually end up saving on interest. I would appreciate if the above queries are answered and the correct picture is conveyed.
