Home loans slacken; banks shift focus to high-yield biz

Lenders await rate transmission, festive season to kick start demand

- MAHESH NAYAK

The home loan industry, once a stable and lucrative asset class for banks, is experiencing a strategic slowdown—not a collapse, but a calculated pause.

A senior banker from a private bank said, "There is a slowdown, particularly among middle- and lower-income borrowers, while affluent buyers are moving ahead, capitalizing on negotiable real estate and low interest rates."

For FY25, home loan origination by volumes dropped 5.4% to 3.47 million, compared with 3.66 million in FY24, according to the latest report by credit bureau agency CRIF Highmark. In value terms, origination rose 2.7% to ₹10.7 lakh crore (₹10.4 lakh crore in FY24).