Housing loans for the home you have in mind

A large decision, taken with the full picture

A home loan is usually the largest and longest borrowing a household takes on. The interest rate matters, but so do the tenure, the processing and legal charges, how prepayment works, and whether the lender is comfortable with the property you have chosen.

Our part is to understand your income, obligations and plans, show you which lenders are likely to suit your case and why, and take care of the paperwork and the follow-up with the lender — so the choice stays yours and the file keeps moving. The loan itself is sanctioned by the bank or housing finance company, under its own credit policy.

• Purpose: Buy, build, extend or renovate a home
• Security: Mortgage of the home being financed
• Rate type: Floating or fixed, as the lender offers
• Repayment: Monthly EMIs over a long tenure
• Applicants: Alone, or with an earning co-applicant
• Lenders: Banks and housing finance companies

What a housing loan can cover

Most home purchases and home projects fall into one of these. The right lender often depends on which.

• Ready & resale homes — A completed flat, row house or bungalow, bought from a developer or from an existing owner.
• Under-construction homes — Usually released in stages as the building progresses, often with interest-only pre-EMIs until the final disbursal.
• Plot + construction — Buying a residential plot and building a home on it, where the lender offers a combined loan.
• Self-construction — Building on a plot you already own, against an approved plan and a cost estimate — funds are usually released stage by stage.
• Renovation & extension — Repairs, upgrades, or adding a room or a floor to the home you already live in.
• Balance transfer & top-up — Moving a running home loan to another lender, sometimes with an additional top-up — when the saving outweighs the cost of switching.

• First-time buyers who want the options laid out before they commit
• Salaried employees, self-employed professionals and business owners
• Families buying jointly, with a spouse or parent as co-applicant
• Owners planning to build on their own plot, or to extend their home
• Borrowers with a running home loan who want a switch reviewed

• Income & its stability — Salary or business income, how steady it has been, and how long you have been in the job or the business.
• Credit score & report — Your repayment record as reported to the credit bureaus — late payments and heavy card use weigh on an application.
• Existing obligations (FOIR) — The share of your monthly income already going to EMIs. Most lenders limit how much all EMIs, the new one included, may take.
• Property value & clearance (LTV) — The lender’s own valuation and its legal and technical checks. The loan is a share of that value; the rest is your own contribution.
• Age & tenure — Your age and working years ahead set how long the loan can run — and so the size of the EMI.

How much housing loan can I get?

It depends mainly on your income, your existing EMIs, your credit record, the tenure your age allows and the value of the property. Lenders usually finance a share of the property’s value and expect the rest as your own contribution. The Eligibility Estimate on our EMI Calculator page gives an indicative figure. The lender’s own assessment decides the actual amount.

Should I choose a floating or a fixed rate?

A floating rate moves with the lender’s benchmark, so your EMI or tenure can change over the life of the loan. A fixed rate stays the same for the period the lender fixes it for, and is often priced higher. We explain what each lender offers so you can weigh the two for yourself.

Can I prepay or close my home loan early?

Usually, yes. Under RBI rules, lenders may not charge prepayment or foreclosure penalties on floating-rate loans taken by individuals for purposes other than business — which covers most home loans. A fixed-rate loan may carry a charge, as set out in its loan agreement.

Can I add a co-applicant?

Most lenders allow it, and an earning co-applicant — often a spouse or parent — can raise the amount you are eligible for. Where a property is owned jointly, lenders commonly ask every co-owner to join the loan.

What is a pre-EMI on an under-construction home?

When a loan is released in stages as the building progresses, many lenders charge interest only on the amount released so far — the pre-EMI — until the final disbursal, when the full EMI begins. Some lenders also let you start full EMIs from the first disbursal.

When does a balance transfer make sense?

When the saving from a lower rate or better terms, over the years left on the loan, outweighs the cost of switching — processing, legal and valuation charges, and stamp duty where it applies. We work those numbers out with you before anything is filed.

Does a home loan carry tax benefits?

It may. Home loan repayments can carry tax benefits under the income-tax rules that apply to you, which depend among other things on the tax regime you choose. A tax adviser or chartered accountant can confirm what applies in your case.