Good To Know: Tips For First Time Home Buyers; Check Latest Interest Rates

First-time buyers often focus only on the property price. But the total cost is often higher, once you count the stamp duty, registration charges, brokerage, legal fees, and interiors

Even a 0.5 per cent change in interest rate can cost you lakhs

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Buying your first home is a big milestone and a major financial decision. With property prices, interest rates, and hidden charges in the mix, mistakes can be expensive. Whether you’re in your late 20s or early 40s, understanding the details is critical. From interest rates to EMI planning, here are five must-know tips for first-time homebuyers.

1. Start with a Realistic Budget 

First-time buyers often focus only on the property price. But the total cost is often higher, once you count the stamp duty, registration charges, brokerage, legal fees, and interiors. A Rs 70 lakh home can easily cost you an extra Rs 6–8 lakh. So, always add 10 per cent to the listed price to realistic estimate. Stick to your budget and ensure your EMI does not exceed 30–35 per cent of your monthly income. 

2. Interest Rates Matter

Even a 0.5 per cent change in interest rate can cost you lakhs. For example, on a Rs 50 lakh loan over 20 years, an 8.5 per cent interest will cost you an EMI of Rs 43,391 while at 9 per cent interest, your EMI will go up to at Rs 44,986. That’s Rs 1,595 more per month, or Rs 3.8 lakh extra over the loan term. Choose between fixed and floating rates wisely. Fixed offers certainty, while floating rates may be cheaper in the long run. Always compare rates across lenders. Use online EMI calculators to plan better.

3. Save More than Just the Down Payment

Banks typically finance 75–90 per cent of the property’s value while you’ll need to fund the remaining 10-25 per cent yourself. Don’t forget to account for initial furnishing costs, moving expenses, and utilities. For instance, a SIP of Rs 15,000 per month for three years in a conservative mutual fund comfortably yields Rs 6–6.5 lakh, which is a smart way to build your home-buying corpus. 

4. Check Your Credit Score before the Bank Does

A credit score above 750 helps you qualify for better rates and faster loan approval. A lower score could mean rejection or a higher rate. Before applying, check your credit report, clear dues, avoid new credit, and don’t miss EMIs. Even a 50-point improvement can save thousands in interest.

5. Assess the Location, Connectivity, and Resale

A cheaper house in a remote area may cost more over time in commute, rentability, and resale. For instance, saving Rs 10 lakh by buying a property that is 25km further away, may be wiped out by daily travel costs. Check for public transport, schools, hospitals, and future infrastructure. A reputed builder in a well-connected area generally offers better resale value.

Home buying requires planning and money. Research the market, assess costs, and think long-term t make a smart decision. The table below shows the latest home loan interest rates from leading public sector banks for loans up to Rs 30 lakh.

Bank Name	Lowest advertised interest rate (Loans under ₹30 lakh)
Bank of Baroda	8.0-9.60
Bank of India	7.85-8.85
Bank of Maharashtra	7.85-10.40
Canara Bank	7.90-10.75
Central Bank	7.85-9.15
Indian Bank	7.90-9.30
IOB	7.90-8.50
Punjab National Bank	8.05-9.70
Punjab & Sind Bank	8.05-11.25
State Bank of India	8.0-8.95
UCO Bank	7.75-9.50
Union Bank of India	7.85-10.25

Disclaimer: Data taken from respective bank’s website as on May 30, 2025. Rates offered to you may vary based on your eligibility. Compiled by BankBazaar.com, an online marketplace for comparing loans and insurance products.

(The author is the Associate Vice President, Communications at BankBazaar.com. This article has been published as part of a special arrangement with BankBazaar)