Everything About Home Loans & Top Tricks (FY 2025–26 Updated Guide)
Buying a home in India is one of the biggest decisions — financially and emotionally.A well-planned home loan can help you: Own property at reasonable EMIs Save lakhs in tax annually Improve credit score Build long-term assets In this guide, we...
Buying a home in India is one of the biggest decisions — financially and emotionally.
A well-planned home loan can help you:
Own property at reasonable EMIs
Save lakhs in tax annually
Improve credit score
Build long-term assets
In this guide, we cover interest rates, eligibility, tax benefits, EMI tricks, documentation, and calculation strategies.
🏦 What Is a Home Loan?
A home loan is a long-term loan taken from banks/NBFCs to purchase, construct, or renovate residential property.
Loan tenure is usually 10 to 30 years.
EMIs consist of:
Principal
Interest
💸 Home Loan Interest Rates (2025–26 Snapshot)
| Bank/NBFC Type | Interest Range (Approx) |
| Public Banks | 8.50% – 9.75% |
| Private Banks | 8.75% – 10.25% |
| NBFCs | 9.50% – 11.75% |
| Home Loan Top-Up | 9.00% – 11.50% |
The interest rate depends on credit score, income stability, loan amount, and property valuation.
📊 Key Eligibility Criteria
Banks consider:
Age: 21–65 years
Income: Minimum ₹25,000/month (varies)
CIBIL Score: Preferably 750+
Job/Business Stability: 2–3 years
Clean repayment history
🧾 Documents Required
Salaried:
Aadhar + PAN
Salary slips (3–6 months)
ITR (last 2 years)
Form 16
Bank statements (6–12 months)
Self-employed:
TIN / GST / business registration
Profit & Loss statements
ITR (3 years)
Bank statements (12 months)
🧮 EMI Calculation Example
Loan Amount ₹50,00,000
Interest 8.80%
Tenure 20 years
Approx EMI = ₹44,000/month
Total Interest Paid = ₹55,60,000
🎯 Tax Benefits on Home Loan (FY 2025–26)
| Tax Benefit | Section | Limit |
| Principal Deduction | 80C | ₹1.5 Lakhs |
| Interest Deduction | 24(b) | ₹2 Lakhs/year |
| Additional First-Time Home Buyer | 80EE | ₹50,000/year (if eligible) |
📌 Total Possible Tax Benefit:
Up to ₹4 Lakhs per year.
Internal Link Example: Learn more at
👉 House Property Income Guide
💡 Top Tricks to Save Lakhs on Your Home Loan
✔ Trick 1: Prepayment in First 5 Years
Interest component is highest in early years.
Even 1–2 EMI prepayment yearly saves lakhs.
✔ Trick 2: Ask for “Reducing Balance” Method
Always choose daily reducing balance instead of “monthly/annual”.
✔ Trick 3: Increase EMI Yearly
Whenever income grows, increase EMI by 5–10%.
✔ Trick 4: Transfer to Lower Interest Rate Bank (BT)
Known as Balance Transfer — can reduce EMI drastically.
✔ Trick 5: Joint Loan with Spouse
Benefits:
Higher loan eligibility
Double tax benefits (24B + 80C)
✔ Trick 6: Improve CIBIL Score Before Applying
CIBIL 750+ = lower interest by 0.25–0.75%
📚 Example – Tax Trick Calculation
Assume:
2 Co-owners (husband & wife)
Loan interest: ₹4,00,000
Each can claim:
- ₹2,00,000 under Section 24(b)
Total benefit = ₹4,00,000 Yearly
This reduces tax outgo significantly.
🏘 Buy Vs Rent — Quick Comparison
| Criteria | Buying | Renting |
| Asset Ownership | ✔ | ❌ |
| EMI | Higher | Lower |
| Tax Benefit | ✔ | ❌ |
| Wealth Creation | ✔ | ❌ |
| Flexibility | Moderate | High |
🧠 Should I buy under old regime or new regime?
If you take a home loan, the old regime is usually better.
Because interest deduction under Sec. 24(b) is significant.
❓ FAQs — Home Loans India 2025–26
Q1: Can I take multiple home loans?
Yes, if income criteria are met.
Q2: Can I claim tax for second property?
Yes, but rules differ; WonderTax can guide.
Q3: Can NRIs apply for home loans?
Yes, in most banks.
Q4: Can I claim 80C even if the loan top-up?
Only if used for construction/purchase — not for renovation.
🛡️ CTA — Let WonderTax Help
Planning to buy property?
Want maximum tax savings?
Need help with EMI calculations?
💼 Book a consultation:
👉 https://wondertax.in/contact-us
