Decision engine

Which home-finance option actually wins?

Government scheme or commercial bank? Shorter or longer tenure? And if a windfall lands mid-loan — clear the debt or invest it? Compare up to three options on EMI, affordability and Present & Annual Worth, watch the debt burn down, then settle the prepay-vs-invest call — all with charts, tables and a plain-English verdict.

Your situation

House price (PKR)

Monthly income (PKR)

Max EMI (% of income)

MARR — your hurdle rate

% /yr

MARR (Minimum Acceptable Rate of Return) is the annual return your money could safely earn elsewhere — we discount every future rupee at this rate so options with different tenures compare fairly.

Financing options

Edit any field — presets are starting points

Down payment %

Tenure (years)

Interest %/yr (nominal)

Processing fee (Y0)

Prepay penalty %

…if before year

Down payment %

Tenure (years)

Interest %/yr (nominal)

Processing fee (Y0)

Prepay penalty %

…if before year

Down payment %

Tenure (years)

Interest %/yr (nominal)

Processing fee (Y0)

Prepay penalty %

…if before year

Head-to-head

Metric	Government scheme	Commercial bank
Loan amount	PKR 12,000,000	PKR 13,500,000
Monthly EMI	PKR 85,972	PKR 149,229
Affordable? (≤ PKR 75,000)	✗ No	✗ No
Total interest paid	PKR 8,633,214	PKR 13,361,194
Year-0 out of pocket	PKR 3,250,000	PKR 1,500,000
Present Worth @ MARR	PKR 11,057,902	PKR 13,933,996
Annual Worth (per year)	PKR 1,544,184	PKR 2,120,912

Monthly EMI vs your ceiling

Present Worth of total cost (lower = cheaper)

Verdict: On a like-for-like annual basis, Government scheme is the most economical (lowest Annual Worth, PKR 1,544,184/yr).

How the debt burns down

Outstanding principal over the life of each loan — steeper = you build equity faster.

Windfall decision: prepay vs invest

enable

Lump sum (PKR)

Received at year

Alt. return (effective)

% /yr

Apply to

Remaining balance at year 3	PKR 12,190,499
Cost to clear in full (incl. 3.0% penalty)	PKR 12,556,214
Your 60.0 Lac makes a partial prepayment	principal PKR 5,825,243 + penalty PKR 174,757
Wealth at maturity — if you PREPAY	PKR 23,758,018
Wealth at maturity — if you INVEST	PKR 32,101,501

Wealth at loan maturity

Invest the lump sum

It leaves you about PKR 8,343,483 better off by loan maturity.

Delicate decision point: the break-even alternative return is 10.6% (≈ the loan’s own rate). Below it, clearing the debt wins; above it — and your figure is 15% — investing wins, only if that return is truly reliable and net of tax.

Reading the numbers — due diligence

Lower EMI ≠ better deal. A longer tenure shrinks the monthly payment but you pay markup for more years — total interest and Present/Annual Worth usually rise. Judge affordability by EMI, but judge value by AW.
Use Annual Worth for unequal tenures. A 20-year and a 15-year loan aren’t comparable on total cost alone; AW puts both on a per-year footing.
Prepay vs invest is just cost-of-debt vs return. Prepaying “earns” you the loan’s interest rate risk-free. Only invest instead if your alternative reliably beats the break-even rate above — after tax and after any prepay penalty.
When NOT to take the loan: if the EMI exceeds a prudent share of income (default risk), if your MARR/alternative returns comfortably exceed the loan rate (your cash works harder elsewhere), or if a non-refundable fee/penalty structure erases the headline “subsidy.”

Indicative model for planning only — scheme rates, fees and penalty terms change and vary by applicant. Confirm current terms with the bank/scheme, and let our team sanity-check your specific case before you commit.

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