Budget 2025 Home Loan: The housing sector is very important to India’s economy, contributing about 13% to the country’s GDP. It is a big source of jobs, and with the Union Budget for 2025 coming soon, there is a lot of hope that the government will introduce measures to help reduce the financial burden on homebuyers. India’s housing market has been growing, mainly due to urbanization, better infrastructure, and more people wanting to own homes.
One area of focus in the upcoming budget is how to make home loans more affordable. Ketan Mukhija, Senior Partner at Burgeon Law, says, “The affordability of home loans depends heavily on fiscal policies and potential relief measures in Budget 2025” He suggests raising the tax deduction for home loan interest from Rs 2 lakh to Rs 3 lakh, reported by Business Standard.
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This change would help middle-class families who are finding it hard to pay for expensive property in cities. Mukhija also says that giving more subsidies for first-time homebuyers under schemes like PMAY (Pradhan Mantri Awas Yojana) would make home ownership easier.
Interest rates on home loans are also affected by the Reserve Bank of India’s (RBI) decisions. If the RBI lowers its repo rate, home loan interest rates would drop, making EMIs more affordable. But Mukhija adds, “While global pressures persist, a major repo rate cut in 2025 appears uncertain,” meaning it might not happen soon because of inflation and economic factors.
Animesh Hardia, Senior Vice President at 1 Finance, also suggests ways the budget could help. He says, “Increasing the Section 80C limit beyond Rs 1.5 lakh and raising the Section 24 exemption for home loan interest would directly benefit borrowers.” He also talks about how reducing GST (Goods and Services Tax) on things like construction materials and home loan insurance would lower housing costs.
N K Gupta, Chairman of Manglam Group, also believes more tax benefits for home loan interest could help middle-class homebuyers. He says, “The affordable housing segment could see a boost with measures like revising the criteria for affordable housing to reflect current property prices.” This means making more people eligible for government schemes and tax benefits.
Adhil Shetty, CEO of BankBazaar.com, suggests that the government could help by increasing tax deductions for home loan interest payments and offering subsidies for first-time homebuyers. He says, “Reviving the Credit Linked Subsidy Scheme (CLSS)… could provide significant subsidies on interest rates.”
There is hope for the housing sector as well. Sudeep Bhatt, Director of Strategy at Whiteland Corporation, says, “The emphasis on allocations for the PMAY will substantially boost the housing segment by addressing the growing demand for housing in Tier 1 cities.” Bhatt also suggests that reducing the GST on under-construction properties to 3% could attract more first-time homebuyers.
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While there is optimism for the housing market, there are challenges, like rising property prices and interest rates. Experts say that to support homebuyers, the government needs to ensure stable interest rates and make buying homes easier. Even with these challenges, there is hope that the upcoming Union Budget will bring policies that will help more people afford homes.
Take a look at the current home loan interest rates offered by various banks, as shared by PaisaBazaar:
Public Sector Banks
1. State Bank of India:
- Up to Rs 30 lakh: 8.50–9.85%
- Rs 30–75 lakh: 8.50–9.85%
- Above Rs 75 lakh: 8.50–9.85%
2. Bank of Baroda:
- Up to Rs 30 lakh: 8.40–10.65%
- Rs 30–75 lakh: 8.40–10.65%
- Above Rs 75 lakh: 8.40–10.90%
3. Union Bank of India:
- Up to Rs 30 lakh: 8.30–10.75%
- Rs 30–75 lakh: 8.30–10.90%
- Above Rs 75 lakh: 8.30–10.90%
4. Punjab National Bank:
- Up to Rs 30 lakh: 8.45–10.25%
- Rs 30–75 lakh: 8.40–10.15%
- Above Rs 75 lakh: 8.40–10.15%
5. Bank of India:
- Up to Rs 30 lakh: 8.35–10.85%
- Rs 30–75 lakh: 8.35–10.85%
- Above Rs 75 lakh: 8.35–11.10%
6. Canara Bank:
- Up to Rs 30 lakh: 8.50–11.25%
- Rs 30–75 lakh: 8.45–11.25%
- Above Rs 75 lakh: 8.40–11.15%
7. UCO Bank:
- All amounts: 8.30% onwards
8. Bank of Maharashtra:
- Up to Rs 30 lakh: 8.35–11.15%
- Rs 30–75 lakh: 8.35–11.15%
- Above Rs 75 lakh: 8.35–11.15%
9. Punjab and Sind Bank:
- All amounts: 8.50–10.00%
10. Indian Overseas Bank:
- All amounts: 8.40–11.00%
11. Indian Bank:
- All amounts: 8.40–10.30%
Private Sector Banks
1. HSBC Bank:
- All amounts: 8.50% onwards
2. South Indian Bank:
- All amounts: 8.50% onwards
3. City Union Bank:
- Up to Rs 30 lakh: 8.25–9.50%
- Rs 30–75 lakh: 8.50–10.00%
- Above Rs 75 lakh: 8.75–10.50%
Housing Finance Companies (HFCs)
1. LIC Housing Finance:
- All amounts: 8.50% onwards
2. Bajaj Housing Finance:
- All amounts: 8.50% onwards
3. PNB Housing Finance:
- Up to Rs 30 lakh: 8.50–14.50%
- Rs 30–75 lakh: 8.50–14.50%
- Above Rs 75 lakh: 8.50–11.45%
