Rohit Sarda, a 34-year-old IT professional in Bengaluru, plans to buy a two-bedroom apartment for ₹80 lakh or less. He starts by assessing affordability, ensuring his home loan EMI stays under 40% of his net monthly income. Using online EMI calculators, he factors in stamp duty, registration and monthly maintenance costs. Rohit shortlists RERA-approved projects near metro lines, prioritising commute time, schools and hospitals. He also evaluates upcoming infrastructure in emerging micro-markets, balancing day-to-day convenience with long-term investment potential.
Prospective homebuyers should closely monitor interest rates, property valuation trends, upcoming infrastructure development, and policy changes impacting real estate. With rapid urbanisation shaping market dynamics, it’s crucial to assess long-term capital appreciation potential by evaluating the local area’s future growth plans.
1) The 40% rule: Keeping home loans financially safe
A buyer should assess affordability by looking at the total cost of owning a home, not just the property price. Using online EMI and eligibility calculators helps estimate a comfortable loan amount based on the applicant’s income, preferred interest rate, and loan tenure. Ideally, the home loan EMI should stay within 40% of net monthly income, while overall debt obligations should not exceed 45–50%, thus leaving room for savings, investments and other expenses. Even if you are getting a higher loan, you should not stretch your budget.
Buyers should also factor in additional costs, such as stamp duty, registration and processing fees, as well as ongoing expenses like property tax, home insurance, and maintenance charges. “Tax benefits and interest subsidies, for example, PMAY-U 2.0, available to first-time buyers, can improve affordability, but the purchase should remain financially comfortable even without relying heavily on these benefits,” says a PNB Housing Finance spokesperson.
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2) Check your credit score
A credit score plays a crucial role in determining the interest rate offered on a home loan. Borrowers with strong credit scores, typically 750 and above, are seen as lower risk and usually qualify for the most competitive rates,” says Adhil Shetty, CEO, BankBazaar. It also determines your loan eligibility.
Those with lower scores may still get a loan, but often at higher interest rates, which can significantly increase the total cost over a long tenure. The resultant difference in interest rate could be marginal, but over a typical 20-year tenure of a home loan, it may result in savings of lakhs in total interest paid.
For instance, a borrower with a CIBIL score of 750 or above is typically eligible for the most competitive rates, whereas a borrower with a score in the 700-725 range may face a higher interest rate.
Pay EMIs and credit card bills on time, keep credit utilisation below 30 per cent, and avoid multiple loan or card applications before applying for a home loan. Maintain a balanced credit mix over time and regularly review credit reports to spot and correct errors that may hurt your score.
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3) Location, connectivity and long-term value
Location plays a key role in both everyday convenience and long-term value. Buyers should check how close the property is to workplaces, schools, hospitals, public transport such as Metro and RRTS, and daily amenities, as this directly impacts lifestyle and commute. From an investment lens, areas seeing infrastructure upgrades, better connectivity and job growth typically help applicants secure better loan terms with the lending institution.
Emerging micro-markets, particularly those supported by government-led infrastructure projects, can offer strong long-term potential.
4) Is the project RERA compliant?
Before finalising a property purchase, buyers must verify that the project meets all legal and regulatory requirements to avoid future risks or delays.
According to a PNB Housing Finance spokesperson, buyers should select RERA-compliant projects by reputed developers and ensure that essential legal and regulatory documentation is in place. Verifying that there are no pending litigations or encumbrances further helps safeguard both liveability and long-term investment security.
5) Developer track record matters
Delays in possession remain one of the most significant risks when buying a property, particularly in under-construction projects. A delayed handover can disrupt financial planning, increase costs, and impact long-term investment returns.
To mitigate this risk, buyers should carefully review the developer’s past track record, including whether previous projects were delivered on time and if there are any complaints or litigation against the builder. Assessing the developer’s financial health is equally critical because cash flow issues can stall construction and cause problems.
Additionally, buyers should verify escrow compliance under RERA, which ensures that funds collected from homebuyers are used specifically for the construction of the project.
