Buying a house? Know the mutual funds that help you

A systematic investment plan in the right funds can grow your portfolio by leaps and bounds

- Sashind Ningthoukhongjam

Owning a house is a lifelong ambition for many. But real estate is extremely expensive—the reason why most investors consider it a major financial goal. While most people dip into their savings and opt for housing loans to make their dream a reality, a few make upfront payments by redeeming their investments—built over the years via systematic investment plans (SIPs) in mutual funds (MFs).

That is how Ravi Kokate, a supply chain officer with e-commerce firm Amazon, was able to buy an under-construction 2BHK (two-bedroom) flat in Navi Mumbai recently. He started by investing ₹500 in mutual funds every month in 2008 and gradually topped up the amount over the years. In August, he redeemed ₹61 lakh from his MF portfolio to fund his dream house.

Kokate benefited from being an early saver. So did Dhinesh Potnuru, a product manager with a fintech firm based in Bengaluru. Soon after he found a job after getting his master’s in business administration in 2016, Potnuru started on his SIP journey and invested ₹20,000 every month. Even the extra income that he earned after switching jobs also went into the SIPs. Although he had to redeem around ₹3 lakh for his wedding in 2018, he had accumulated enough savings by 2021 to finalize the purchase of a 3BHK under-construction flat in Bangalore. He got possession of the house in May.

Potnuru, who took a loan of ₹1.1 crore, made a down-payment of ₹22 lakh. Of this, ₹16 lakh came from MF investments—45% of his portfolio.