Home Loan in Pune (2026): EMI, Eligibility and Tax Benefits

Most people who buy a flat in Pune take a home loan, and the loan often costs more over its life than the flat itself. This guide explains how a home loan in Pune works in 2026: what interest rates look like after the RBI's October rate hike, how much you can borrow, what the EMI will be, and which tax benefits you can still claim under the new Income-tax Act.

Interest rates after the October 2026 rate hike

On 7 October 2026 the Reserve Bank of India raised the repo rate by 0.25 percentage points, from 5.25% to 5.50%, its first increase in years. It also changed its stance to "calibrated tightening", which signals that cuts are unlikely in the near term.

Most floating-rate home loans are linked to the repo rate, so banks passed the increase on. SBI, for example, raised its external benchmark lending rate from 7.90% to 8.15% with effect from 15 October 2026. Its regular home loans now range from about 7.50% to 8.80%, depending on the borrower.

What this means for you:

• Your credit score sets your rate. The lowest advertised rates usually need a CIBIL score of about 750 to 800 or more.
• Existing borrowers feel it at the next reset. Repo-linked loans reset at least every three months, and your bank must offer you the choice of a higher EMI, a longer tenure or a switch to a fixed rate.
• Compare the rate you are offered, not the headline rate. Ask each lender for its Key Fact Statement, which shows the actual rate, fees and total cost.

How much can you borrow?

Two limits decide your loan amount.

1. The loan-to-value (LTV) limit. RBI rules cap the loan as a share of the property cost:

Stamp duty and registration are not counted in the property cost for this purpose, so you pay them from your own funds. In Pune that is 6% to 7% of the value plus up to ₹30,000 for registration. Use our stamp duty calculator to see the exact figure.

2. Your income. Lenders usually keep all your EMIs, including car and personal loans, within about 40% to 60% of your take-home pay. Adding a co-applicant, usually a spouse or parent who is also a co-owner, lets the lender count both incomes.

Other common conditions: a maximum tenure of 30 years, the loan ending before you turn 60 to 70, and a processing fee of roughly 0.25% to 1% of the loan plus GST.

What will your EMI be?

The EMI depends on the loan amount, the rate and the tenure. These figures use the standard EMI formula and are rounded to the nearest rupee:

Two things stand out. Stretching a ₹1 crore loan from 20 to 30 years cuts the EMI by about ₹10,000 a month but adds roughly ₹69 lakh in interest at 8.5%. And every 0.5 percentage point on the rate changes the EMI on a ₹1 crore, 20-year loan by about ₹3,100 a month.

Prepaying helps. RBI rules do not allow banks to charge a prepayment or foreclosure penalty on floating-rate home loans taken by individuals, so part-prepayments from bonuses can cut years off the loan.

Tax benefits under the Income-tax Act, 2025

From 1 April 2026 the Income-tax Act, 2025 replaced the 1961 Act. The benefits are broadly the same, but the section numbers changed:

• Interest: under section 22, which replaces the old section 24(b), you can deduct up to ₹2 lakh a year of interest on a self-occupied home. Interest paid before possession is claimed in five equal instalments from the year construction is completed, within the same limit.
• Principal: under section 123, which replaces the old section 80C, principal repayment, stamp duty and registration count towards the overall ₹1.5 lakh limit.
• The catch is your tax regime. Both deductions for a self-occupied home are available only under the old regime. The new regime, now the default, allows no deduction for interest on a self-occupied home.
• Let-out property: interest is deductible against the rent under both regimes, but under the new regime a loss from house property cannot be set off against your salary.

The extra deduction for first-time buyers under the old section 80EEA applied only to loans sanctioned by March 2022, so it is not available on a new loan. Ask your chartered accountant which regime works out better once you include the home loan.

Loans on under-construction flats

For a flat that is still being built, the bank releases the loan in stages as construction progresses. Until the full amount is released, you can pay only the interest on what has been disbursed, called pre-EMI, or start the full EMI early so that your principal starts falling sooner. Our ready-to-move vs under-construction guide explains how this changes the total cost.

Be careful with "subvention" offers, where the developer promises to pay your EMIs until possession. In 2025 the Supreme Court criticised banks and builders in the NCR after developers stopped paying and banks pursued the buyers, and the CBI registered cases. The loan is in your name, so you are liable if the developer defaults. Choose a project with a sound MahaRERA registration and a developer whose past projects were delivered on time.

Before you apply: a checklist

• Check your credit report and fix any errors a few months before you apply.
• Work out the full cost: the price, GST if under construction, stamp duty, registration, and charges such as parking and the maintenance deposit. Our stamp duty guide lists them.
• Keep at least 20% to 25% of the cost, plus the stamp duty, ready in your own funds.
• Get offers from three or four lenders and compare the Key Fact Statements.
• Check whether the lender has already approved the project, which usually speeds up the loan. For projects we list, such as Kings County in Wakad, Mahindra Citadel and Kohinoor Westview Reserve, ask us which lenders have them on their approved list.
• If you live abroad, read our NRI guide first. NRIs can take home loans in India, with repayment from an NRE or NRO account.

The PROPHUNT view

Before you take a home loan in Pune, plan your budget on a rate of about 8.5% rather than the lowest rate a bank advertises, and choose the shortest tenure whose EMI you can comfortably pay. A good credit score, a well-chosen co-applicant and regular prepayments will save you far more than chasing a few basis points. Our advisors can help you shortlist projects that match your loan eligibility and introduce you to lenders who have already approved them. Talk to us before you apply.

Interest rates, RBI rules and tax provisions change. This article reflects published information as of late October 2026 and is general information, not financial or tax advice. Confirm rates with your lender and tax treatment with your chartered accountant.