Although the borrower must provide a certain amount from their own funds, banks often lend 75–80% of the total deal value. While the RBI sets a maximum of 75%, some banks are ready to incorporate the stamp duty and registration fees in the loan amount, making the lent amount technically 80% of the agreed value. The lending rate associated with the house loan also fluctuates periodically, contingent upon market liquidity and the state of the economy.

One of the fundamental but little-known details of house loans is that most banks need the borrower to obtain insurance to safeguard the loan. This guarantees that they will receive their money back in the event that the borrower passes away or becomes unable to repay the loan for any other reason. This is due to the lengthy duration of such an arrangement between the lender and the borrower. A house loan is typically repaid over a number of years, unless the borrower has the resources to pay it back all at one time.

In the event that unanticipated events or modifications to the money market occur, the bank is entitled to unfix and raise the fixed interest rate.

The principle and interest rate are the two main factors used to determine the monthly installment amount (EMI) for any loan. During the first few years of your loan payback term, a significant portion of the sum goes toward paying interest. The tendency flips after a few years and the principle repayment goes up after you have paid off the majority of the interest. Because house loan interest rates are so high these days, banks are forced to extend tenure just so far. If the interest rate keeps rising, the EMI you pay is insufficient to pay off the loan balance. Before you purchase a property, you should be aware of these crucial home financing information.