What a home loan actually involves
A home loan is money a bank or housing finance company lends you to buy a property, which you repay over time with interest, in monthly instalments (EMIs). The property itself is held as security until the loan is repaid in full.
Lenders typically finance a portion of the property's value — commonly up to around 75-90%, depending on the property price and the lender's policy — with the rest expected as your own down payment. The exact figure, called the loan-to-value (LTV) ratio, is set by the lender at the time of approval.
Common types of home loans
Fixed-rate loan
Your interest rate stays the same for the agreed period, so your EMI doesn't change even if market rates move. Easier to budget around, though the starting rate is usually a little higher than floating.
Floating-rate loan
Your rate moves with the lender's benchmark rate, so your EMI can go up or down over time. Most home loans in India are floating-rate by default.
Balance transfer
Moves your existing loan to a new lender, usually to get a lower rate or better terms. Worth considering if rates have dropped since you first borrowed.
Top-up loan
Additional borrowing on top of an existing home loan, often at a lower rate than a personal loan, typically used for renovation or other large expenses.
How the process usually goes
- 1Shortlist a property and get a sense of your budget.
- 2Apply with one or more lenders, or let us help you compare offers.
- 3Submit income, identity, and property documents for verification.
- 4The lender values the property and confirms the loan amount it will sanction.
- 5On approval, sign the loan agreement and the funds are disbursed, usually directly to the seller or builder.
Not sure which loan fits your situation?
Read next about how we help with the loan process, or talk to an agent directly.