EPF for Home Loan Repayment: A Smart Move or a Financial Faux Pas?

• Many salaried individuals consider using their EPF balance to repay home loans due to the growing balance and the desire to be debt-free.
• EPF offers 8.25% tax-free interest, while home loan rates are around 7.5%, making the immediate calculation seem close.
• EPF is a mandatory, long-term, tax-free retirement capital, crucial for financial security, unlike a home loan which is a diminishing liability with potential tax benefits.
• Withdrawing EPF for a 20 lakh home loan saves 9 lakh in interest over 10 years but eliminates the 44 lakh tax-free corpus EPF would generate.
• It's generally more advantageous to let EPF compound due to its higher tax-free returns, unless nearing retirement, having excess EPF, facing high loan interest, or severe cash flow issues.

Why It Matters: Using EPF for home loan repayment often sacrifices long-term tax-free growth for short-term debt relief.