Will Budget 2025 make home loans cheaper? Here's what experts say

Finance Minister likely to announce measures for affordable housing, they say

With the Union Budget two days away, home loan borrowers are hoping for measures that could ease their burden. As property prices rise and interest rates fluctuate, many hope Finance Minister Nirmala Sitharaman will provide relief in the form of tax deductions, subsidies, and other incentives.

 

“Affordable housing remains a key pillar of the nation’s development agenda, and Budget 2025 presents a crucial opportunity to turn this vision into reality. Introducing initiatives to reduce home loan interest rates would provide much-needed financial relief to families, stimulate the real estate and allied industries, generate employment, and drive economic growth,” said Gaurav Mittal, founder, Golden Abodes, a property development company.

 

Key expectations from Budget 2025, according to financial experts.

 

Tax deductions

 

“Lowering home loan interest rates could boost the housing sector, while raising the Section 24(b) tax deduction limit from Rs 2 lakh to Rs 3 lakh would offer much-needed relief. Expanding subsidies under PMAY (Pradhan Mantri Awas Yojana) and reviving the Credit Linked Subsidy Scheme (CLSS) could also drive demand,” said Aditya Jhaveri, founder and chief executive officer (CEO) of Blox, which describes itself as an end-to-end digital home-buying platform.

 

Credit linked subsidy scheme

 

There is popular demand for reintroducing CLSS under PMAY. This scheme previously provided interest subsidies to first-time homebuyers and its revival could make homeownership more accessible for lower-income groups. Many stakeholders believe that updating income criteria and loan limits within this scheme is crucial for enhancing housing affordability.

 

GST reductions

 

Another area of focus is Goods and Services Tax (GST) on housing. Experts said that reducing 18 per cent GST on under-construction properties and affordable housing could help lower overall costs for homebuyers.

 

“The Budget itself might not directly lower home loan rates, but any measures aimed at boosting housing or economic stability will have a positive effect. That said, the RBI will likely be cautious with rate cuts, balancing inflation concerns with the need to support growth. So while we can reasonably expect lower rates in the near future, the full picture will depend on how the economy plays out,” said Pranit Arora, founder and CEO of Univest, a market research focussed fintech platform.

 

“As we wait for these announcements, it is hoped that Budget 2025 will strike a balance between fiscal responsibility and immediate, exigent measures for affordable housing solutions, ushering in a better and more stable future for homeowners around the country,” said Pramod Kathuria, founder and CEO, Easiloan.