This document provides an overview of housing finance in India. It discusses eligibility requirements for home loans such as a minimum income of Rs. 25,000 per month and a CIBIL score of 650. It also describes different types of home loans and compares fixed versus floating interest rates. Key terms like loan-to-value ratio, pre-EMI payments, and fixed obligation to income ratio are introduced and their calculations explained. The document concludes by listing some top banks for home loans and current home loan interest rates in India.

1. HOUSING
FINANCE IN
INDIA
A c o m p r e h e n s i v e r e p o r t
b y
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2. Add a Footer 2
1. ELIGIBILITY 02
2. TYPES 03
3. FLOATING VS FIXED INTEREST RATES 04
4. PRE-EMI 05
5. LOAN TO VALUE – INTRO 07
6. LTV – CALCULATION & SLAB 08
7. FOIR – INTRO 10
8. FOIR – CALCULATION & SLAB 11
9. TAX BENEFITS 12
10. BEST BANKS 13
11. INTEREST RATES – 2020 14
12. SOURCES & CREDITS 15
CONTENTS

3. ELIGIBILITY
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Age of the Applicant 18 to 70 years
Eligible Salary Rs. 25,000 per month and above
Work Experience for Salaried 3 years and above
Business Stability for Self Employed 5 years and above
Minimum CIBIL Score 650
Maximum Loan on Property Value Up to 90%
Maximum EMI as percent of income 65%
Eligibility with Co-applicant Up to 3 earning family members may be
added to get higher loan eligibility

4. TYPES OF HOME LOANS
• Purchase of Residential Property
• Construction of a House
• Purchase of Land
• House Expansion
• Home Improvement Loans
• Home Conversion Loans
• Balance Transfer Home Loans
• NRI Home Loans
• Bridged Loans
• Stamp Duty Loans
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5. FIXED INTEREST RATES
A fixed interest rate is one where the
interest amount is fixed and does not
vary depending upon market
fluctuations.
PROS
• Greater predictability
• Suitable for short-term loans
CONS
• Higher rate of interest
• Limited repayment tenure
• Prepayment penalty
Also known as ‘adjustable rate home
loans’, is a home loan where the interest
rate keeps changing over the course of the
fixed loan, due to differences in the
market rate.
PROS
• Lower interest rates
• Can reduce the total interest payable
• No prepayment penalty
CONS
• Difficult to budget
• Highly subjective to market factors
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FLOATING INTEREST RATES

6. PRE-EMI ON HOME LOAN
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Pre-EMI is the applicable interest payment to the amount
that is disbursed over the entire tenure of a home loan. It
begins when the house is under construction. Once the
structure is complete pre-EMI payments end, and generous
EMI payments start.
Equated Monthly Instalment (EMI) is a repayment option on
a home loan where both interest and principal amount are
paid to the lender through a fixed monthly payment.
Nowadays, lenders are offering innovative methods for the
repayment of the home loan. One of the options is the pre-
EMI plan; wherein, the homebuyers only pay the interest
amount on the partly disbursed home loan amount as per
the stage of construction of the property. This plan is only
applicable for under-construction properties.

7. LTV
Loan to Value Ratio

8. LTV - INTRO
The loan-to-value (LTV) ratio is based on the size of home
loan sought and determines the maximum amount that can
be sanctioned to a property buyer..
The LTV can range from 75 per cent to even 90 per cent of
the property value and also depends on the borrower’s
relationship with the lender and the scheme availed.
A higher LTV implies a greater loan amount and therefore,
lesser down-payment that you need to arrange out of your
pocket. However, it also means a higher EMI. A lower LTV
means that you have to arrange for a larger sum to be paid
as down-payment.
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9. LTV CALCULATION & SLABS
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Outstanding Loan LTV Ratio(%) Risk Weight(%)
Upto 30 Lakhs
< 80 35
> 80 & < 90 50
30 – 75 Lakhs < 80 35
Above 75 Lakhs < 75 50

10. FOIR
Fixed Obligation to Income Ratio

11. FOIR - INTRO
• Fixed Obligations to Income Ratio (FOIR) is the parameter used by
banks and other financial organisations to determine the eligibility for a
loan of an individual.
• The FOIR of a person is derived by taking into account all the fixed
monthly obligations that he or she should meet without including the
statutory deductions such as Provident Fund, Investment Deductions,
or Professional Tax.
• While additional expenses such as rent can also be considered as fixed
obligation depending on the level of income, the FOIR reflects the
disposable income of a candidate that can be used to pay off his or her
debts - existing and new. Therefore, the loan eligibility of an individual
highly depends on his or her FOIR.
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12. FOIR - CALCULATION & SLABS
The formula for calculating the FOIR:
FOIR = (All Existing Obligations/Net Monthly Salary) * 100
FOIR SLABS :
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Gross Salary FOIR %
Rs.20,000 50%
Rs.30,000 55%
Rs.40,000 + 59-60%

13. TAX BENEFITS ON
HOME LOAN
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Income Tax Act
Maximum Deductible
Amount
Section 24
Rs.2 lakh (for self-
occupied house)
No limit (for let-out
property)
Section 80C
Rs.1.5 lakh from
Principal (including
stamp duty and
registration fee)
Section 80EE
Rs.50,000 Additional
interest (for first-time
buyers)

14. BEST BANKS FOR
HOME LOANS
1. SBI
2. HDFC Bank
3. LIC Housing Finance
4. AXIS Bank
5. ICICI Bank
6. IDBI Bank
7. Bank of India
8. PNB Housing
9. Others
40%
17%
4%
4%
18%
3%
2%
2%
10%
BEST BANKS SURVEY
SBI HDFC AXIS ICICI LIC
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15. HOME LOAN INTEREST RATES - 2020
Banks Interest Rate Processing Fee
State Bank of India 7.15% - 7.55% p.a. Rs.2,000 – Rs.10,000
HDFC Ltd. 8.00% - 8.30% p.a Up to 0.50%
ICICI Bank 8.60% - 9.40% p.a. 0.50% to 1%
Axis Bank 8.55% - 9.40% p.a Up to 1%
PNB Housing Finance Ltd. 8.95%- 9.95% p.a. Up to 0.25% (max. Rs.15,000) + GST
LIC Housing Finance Limited 8.40% - 8.50% p.a. Rs. 10,000- Rs.15,000
(+Service Tax)
United Bank of India 8.00%- 8.15% p.a. Rs.1000/ or Above
Bank of India 8.00% - 8.30% p.a. 0.25%
(Max. Rs.20,000)
IDBI Bank 8.25% - 8.80% p.a. 0.50%
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16. Created by
Rahil Mohamed
CBRE – Residential
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Sources
• Moneycontrol.com
• Bankbazaar.com
• Financialexpress.com
• Hdfc.com
• Investopedia.com
• Moneytap.com
• Goodreturns.in
• Makaan.com
• Housing.com
• Rbi.org.in
• Andrewprokos.com

17. THANK YOU
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