Buying a home marks an exciting new chapter in life—and it often starts with choosing the right home loan for the new purchase. Whether you’re a first-time buyer or upgrading to a larger space, selecting the appropriate type of new home loan is essential for a smooth and financially sound home-buying journey.
In India, homebuyers typically choose between two major types of loans: Affordable Home Loans and Regular Home Loans. While both serve the purpose of financing your property, they cater to different borrower profiles and come with distinct features.
In this guide, we’ll break down the key differences between these two types of loans to help you make an informed decision for your next property purchase.
What is an Affordable Home Loan?
An affordable home loan is designed to assist individuals and families from the lower and middle-income segments. These loans are often backed by government schemes such as the Pradhan Mantri Awas Yojana (PMAY), making it easier for eligible homebuyers to own a house.
Key Features of Affordable Home Loans:
- Lower interest rates (subsidised in many cases)
- Smaller loan amounts (typically between ₹6–50 lakhs)
- Extended repayment tenures
- Government subsidies (under schemes like PMAY-CLSS)
- Eligibility based on income level, property size, and location
Affordable home loans are ideal for those buying their first home or a modestly priced property in government-approved housing projects.
What is a Regular Home Loan?
A regular home loan is a standard offering from banks and non-banking financial companies (NBFCs), available to a broad range of borrowers. It is suitable for individuals looking to purchase, construct, or renovate residential properties without the restrictions of income caps or property value limits.
Key Features of Regular Home Loans:
- Higher loan amounts (can exceed ₹1 crore)
- Flexible repayment options
- Available for both salaried and self-employed individuals
- Customisable tenure and interest options (fixed/floating)
- Suitable for a wide range of property types, including luxury homes
If you’re looking for a home loan for new purchase of a high-value or premium property, regular home loans provide the flexibility and funding needed.
| Factor | Affordable Home Loan | Regular Home Loan |
| Target Audience | Lower-income and middle-income groups | All eligible individuals |
| Loan Amount | ₹6–50 lakhs | ₹10 lakhs to ₹1 crore+ |
| Interest Rate | Subsidised rates (can go as low as 6.5%) | Market-linked (typically 8%–11%) |
| Government Subsidy | Eligible under PMAY-CLSS | Not eligible for subsidies |
| Property Criteria | Affordable housing units within set size and value limits | No restrictions—can include luxury homes, resale properties, etc. |
| Eligibility Conditions | Based on income ceilings, housing history, and property location | Based on income, credit score, and repayment ability |
Which Home Loan Is Right for You?
When deciding between an affordable and regular loan, consider the following:
Choose an Affordable Home Loan if:
- Your household income falls within the PMAY income categories (EWS, LIG, MIG)
- You’re buying a modestly priced, first-time home
- You want to benefit from interest subsidies and lower EMIs
Choose a Regular Home Loan if:
- Your income exceeds PMAY eligibility limits
- You are purchasing a higher-value or luxury property
- You need a larger loan amount with more flexibility in repayment
Final Thoughts
Selecting the right new home loan is a critical part of your home-buying journey. Whether you’re going for an affordable home loan backed by government support or a regular home loan offering greater flexibility, understanding your options can lead to smarter financial decisions.
Always evaluate your income, financial goals, and the type of property you’re planning to buy. If needed, consult a home loan advisor to determine the best home loan for a new purchase based on your profile.
With the right home loan, your dream of owning the perfect home—whether budget-friendly or premium—can soon become a reality.
Santosh Kumar is a Professional SEO and Blogger, With the help of this blog he is trying to share top 10 lists, facts, entertainment news from India and all around the world.