Glossary · Real Estate & RERA
Home Loan
A secured loan provided by banks and housing finance companies (HFCs) to finance the purchase, construction, or renovation of a residential property.
Home loans are long-tenure (up to 30 years) and are secured by the property being purchased. Interest rates are either fixed (6 months to 5 years) or floating (linked to the bank's repo-linked lending rate, MCLR, or external benchmark). Loan-to-value ratio is up to 90% for properties up to ₹30 lakh and 80% above. Tax benefits under Section 80C (up to ₹1.5 lakh on principal), Section 24(b) (up to ₹2 lakh on interest), and Section 80EEA (additional ₹1.5 lakh for affordable housing) make home loans attractive.
Examples
A salaried couple buys a ₹50 lakh flat with a 20-year home loan of ₹45 lakh at 8.5% interest, paying ₹39,240/month EMI and saving up to ₹3.5 lakh in taxes annually.