Buying a home is a significant milestone, often requiring financial assistance through a home loan. Private banks offer home loans to help individuals buy, construct, or upgrade residential real estate properties. Understanding the nuances of home loan interest rates, the importance of a good credit score, Equated Monthly Installments (EMIs), and the important documents to check before buying a property can make this process smoother and more cost-effective.

Importance of credit score

Your interest rate is linked to your credit score, which can be ensured by timely payment of all EMIs and credit card dues. Being a super-prime borrower (score: 800+) helps you get a lower home loan rate.

Equated Monthly Instalment
EMI or Equated Monthly Instalment is a fixed amount paid by you to the bank on a specific date every month. The EMI's are fixed when you borrow money from the bank as a loan. EMI's are used to pay both interest and principal amount of a loan in a way that over a specific number of years, the loan amount is repaid to the bank along with interest.

Interest rate
Many private banks offer home loans to their customers and interest rates differ depending on credit score, home loan tenure, age, and occupation. Here is a quick comparison of interest rates being offered by private banks in May 2025.

The EMI is calculated on a loan of Rs 30 lakh for 20 years.


What documents should I check before buying a new property?
Below are the documents borrowers need to check when buying a new property.

• Sale Deed
• Title Deed
• Approved Building plans
• Completion Certificate (For Newly constructed property)
• Commencement Certificate (For Under-construction property)
• Conversion Certificate( If agricultural land is converted to non-agricultural)
• Khata Certificate (especially in Bengaluru)
• Encumbrance Certificate
• Latest Tax Receipts
• Occupancy Certificate

By understanding the fixed and floating interest rates, maintaining a strong credit score, managing EMIs effectively, and verifying essential property documents, you can make informed decisions that align with your financial goals.

How does my salary influence my home loan amount?
According to SBI home loan FAQs, “Apart from other criteria and norms of the lending bank, the home loan amount is generally calculated on the basis of your EMI and NMI ratio, where NMI is the take-home pay after taxes and other payroll deductions. The EMI/NMI ratio varies in the range of 20% to 70% for different Net Annual Income slabs. The loan amount can be increased by including a co-applicant.”