Home loans from 7.05%: Why borrowers in Delhi-NCR, Mumbai are taking bigger loans despite stable rates?

Homebuyers in India are borrowing larger sums to purchase properties amid rising prices, even as home loan rates remain stable at around 7.05% from public sector banks. Property prices in major cities like Delhi-NCR, Mumbai, and Hyderabad have climbed sharply, pushing average loan sizes higher. The National Housing Bank (NHB) reports outstanding home loans in India grew from Rs 9.98 lakh crore in 2015 to Rs 37.14 lakh crore in 2025, with the home loan-to-GDP ratio increasing from 8% to 11.23%. The Reserve Bank of India (RBI) noted a 4.2% rise in the All India House Price Index (HPI) in the January-March quarter of FY26, up from 3.8% in the same period last year. Urban Money’s Homebuyers Credit Pulse Report highlights that Mumbai, Gurugram, and Hyderabad saw average loan ticket sizes increase by over 20% annually, with Mumbai’s Metropolitan Region (MMR) leading demand for premium homes. CRE Matrix data shows the average ticket size for primary housing sales reached Rs 1.42 crore, driven by wealthy upgraders seeking high-value properties. Borrowers now consider factors beyond interest rates, such as processing charges, future rate resets, and loan flexibility, which impact long-term costs. Rising household incomes and confidence in long-term earnings have further encouraged buyers to stretch their budgets for larger or premium residences.