First Home Loan: Everything You Need to Know

Buying your first home is the biggest financial decision most Indians will ever make. Here's everything you need to know about home loans.

How Much Can You Borrow? Banks typically approve loans where EMI is 40-50% of your net monthly income. For a salary of ₹1,00,000/month, you can expect approval for ₹50-60 lakh at current rates.

Fixed vs Floating Rate Choose floating rate — almost always. Floating rates (8.5-9.5%) are lower than fixed rates and RBI regulations ensure no prepayment charges on floating rate loans for individuals.

Current Best Home Loan Rates (2025) 1. Bank of Baroda: 8.4% onwards 2. SBI: 8.5% onwards 3. LIC HFL: 8.5% onwards 4. HDFC Bank: 8.7% onwards 5. ICICI Bank: 8.75% onwards

Tax Benefits - Section 24(b): Deduction up to ₹2 lakh on interest paid (self-occupied property) - Section 80C: Deduction up to ₹1.5 lakh on principal repayment - Section 80EEA: Additional ₹1.5 lakh for affordable housing (stamp value up to ₹45 lakh)

Tips for First-Time Buyers 1. Save at least 20% as down payment to avoid LTV charges 2. Compare at least 3-4 banks before finalizing 3. Check processing fee — ranges from 0.25% to 1% 4. Always go for floating rate 5. Pre-approved home loans get faster disbursement 6. Women co-borrowers get 5 basis points rate concession at most banks 7. Maintain a CIBIL score above 750 for the best rates