BASIC Home Loan has released a consumer insights report highlighting generational and digital shifts in India’s housing finance market. Titled How Bharat Finances Its Housing Dreams, the report finds that Millennials and Gen Z account for nearly 90–95% of home purchases, while around 72% of borrowers under 40 prefer applying for home loans online.
The study is based on primary survey data collected from over 7,400 existing and aspiring homebuyers across India, with strong representation from Tier-2 and Tier-3 cities. The survey was conducted in partnership with Paytm, with CommsCredible as knowledge partner.
The report highlights the growing adoption of digital home loan journeys. While younger borrowers lead digital adoption, older borrowers are also shifting online. Nearly 47% of borrowers above 60 indicated they are comfortable applying for loans digitally.
The report notes the role of IndiaStack in enabling paperless processes. Around 80% of DigiLocker users in the home loan process are aged 35 or below, reflecting higher adoption of digital documentation among younger borrowers.
Atul Monga, CEO and Co-Founder, BASIC Home Loan, said younger borrowers are driving demand for faster and more transparent loan processes, adding that reducing documentation and leveraging digital infrastructure can expand access to housing finance across metros and smaller towns.
Public sector banks remain the preferred choice for many borrowers due to competitive interest rates and branch networks. Among borrowers aged 26–35, 48% prefer public sector banks, while 11% opt for NBFCs or microfinance institutions (MFIs).
However, older borrowers and those with non-traditional income sources show higher reliance on NBFCs and MFIs. In the 51–60 age group, preference for public sector banks drops to 39%, while 21% choose NBFCs or MFIs, indicating their role in serving segments that may not meet traditional bank criteria.
Interest rates remain the primary factor in selecting a home loan, particularly for borrowers under 34. However, speed of processing, transparency, flexible terms and customer experience are increasingly influencing decisions.
The report also flags persistent concerns around excessive paperwork and mis-selling, underscoring the need for simpler processes and improved trust in the housing finance ecosystem.
Metro homebuyers show greater willingness to take on higher EMI-to-income ratios and longer tenures, while borrowers in rural markets prefer shorter repayment periods and more conservative EMI commitments.
The report references the 2024 Affordability Index by Knight Frank, which indicates improving EMI-to-income ratios across major Indian cities, supported by relatively stable interest rates and policy measures.
Improved connectivity, digital public infrastructure and greater financial awareness are contributing to stronger housing demand in Tier-2 and Tier-3 cities. The report identifies these markets as key growth drivers for housing finance in the coming years.
Raj Vikash Verma, former Chairman and Managing Director of National Housing Bank, said that strengthening transparency and expanding access in non-metro markets can enhance housing’s role in social and economic development.
Founded in 2020, BASIC Home Loan operates as an online mortgage brokerage platform with a network of over 26,000 agents across 650 districts and more than 150 financing partners. The company says it processes loan applications worth over $1 billion each month and focuses on expanding access to housing finance in Tier-2 and Tier-3 markets.
