How to Compare Two Home Loan Offers Properly
A 25-basis-point difference on a ₹75 lakh loan is worth about ₹3 lakh over 20 years. A five-year tenure difference is worth far more.
Hemant Srivastava
Founder, PropertyPilot India
5 min read
Compare total outgo, not EMI
A longer tenure always produces a smaller EMI and a larger total interest bill. Stretching a ₹75 lakh loan at 8% from 20 to 30 years cuts the EMI by roughly ₹12,000 but adds well over ₹40 lakh of interest. Use the mortgage comparison tool to see EMI, total interest and total outgo for each structure in one view.
Weigh the down payment against opportunity cost
Every extra rupee of down payment saves interest at your loan rate — currently around 7.5–8.5%. That is a guaranteed, tax-adjusted return that most portfolios do not beat reliably. But do not exhaust your emergency fund: three to six months of expenses should stay liquid and outside the property.
Read the fee line
Processing fees range from 0.25% capped at ₹10,000 at public banks to as much as 1–2% of the loan at some housing finance companies. Add legal, technical, CERSAI and documentation charges, plus GST. On a ₹75 lakh loan the gap between lenders can exceed ₹1 lakh before you have paid a single EMI.
- Ask for the rate spread over the external benchmark, not just today's rate
- Confirm the reset frequency and whether resets adjust EMI or tenure
- Check part-prepayment rules for floating loans — there should be no penalty
- Compare insurance bundling; it is optional and often better bought separately