How Home Financing Works
A home loan is typically a secured loan — the property itself acts as collateral. Lenders usually finance a portion of the property value, and you contribute the remaining amount as a down payment. The loan is then repaid via EMIs over a tenure that can extend up to 20-30 years, depending on the lender and your profile.
Eligibility Factors
- Income and employment stability
- Credit score and repayment track record
- Age and remaining working years
- Property value and location
- Existing financial obligations
Fixed vs Floating Rates for Home Loans
A fixed-rate home loan keeps your interest rate unchanged for a set period (or the full tenure), offering predictable EMIs. A floating-rate loan moves with a benchmark rate, which means your EMI or tenure can change over time. Each has trade-offs worth understanding — read our detailed guide on fixed vs floating interest rates.
Repayment & Prepayment Considerations
- Longer tenures reduce your EMI but increase total interest paid
- Prepaying part of the loan when possible can reduce total interest
- Check whether prepayment or foreclosure charges apply
- Factor in additional costs like processing fees, legal and valuation charges
Estimate your monthly repayment with the EMI Calculator before you start house-hunting.