FAQ · Finance
Financing decisions shape the real return on a property purchase as much as the entry price does. This page answers the recurring loan-eligibility, LTV and tax-benefit questions buyers raise before committing capital.
Get in-principle loan sanction before you commit to a project, and keep EMI within 40–45% of net monthly income to protect against rate cycles.
Eligibility depends on income, existing EMIs, credit score and property value, but lenders generally cap EMI at 40–50% of net monthly income and loan-to-value at 75–90% of the property's assessed value.
RBI guidelines cap LTV at 90% for loans up to ₹30 lakh, 80% for ₹30–75 lakh, and 75% for loans above ₹75 lakh — the buyer must fund the remainder from own resources.
Principal repayment qualifies for deduction up to ₹1.5 lakh under Section 80C, and interest on a self-occupied property qualifies for deduction up to ₹2 lakh under Section 24(b), subject to the applicable tax regime chosen.
Most Indian home loans are floating and linked to the repo rate, offering lower long-run cost with rate variability; fixed rates offer payment certainty but usually at a rate premium and with reset clauses.
Yes, disbursed under a construction-linked plan tied to builder milestones; interest is payable only on the amount disbursed until full disbursement, after which EMI on the full loan begins.
Under subvention, the developer services the loan interest until possession. It eases upfront cash flow but has led to disputes where developers stopped payments during delays — the loan liability remains the buyer's regardless.
NRIs can access home loans from most major lenders, but typically at a somewhat lower maximum LTV and with added documentation such as proof of overseas income, employment and NRE/NRO account details.
On floating-rate home loans, RBI rules prohibit banks from charging prepayment or foreclosure penalties to individual borrowers, making early repayment a straightforward way to reduce total interest cost.