InvestorQ : What is a margin on a home loan?
Pratik vyas made post

What is a margin on a home loan?

Manisha Mehta answered.
3 years ago

Margin is a very important concept that first-time home buyers should know about.

So, when you approach a bank or an NBFC for a home loan, the lender will not sanction a loan for the entire cost of your home. Thus, the margin on a home loan refers to the percentage of your home’s cost that is not covered or loaned by a lender.

On average, lenders have a 20% margin on home loans. This means that the home loan amount sanctioned to you will be 80% of the actual cost of the property and you will have to bear 20% of the home loan cost yourself.

Do note that while it is the industry average to have 20% margin, lenders may choose to increase or decrease their home loan margins on a case-to-case basis.