New Delhi, May 13 -- Buying a home is the largest financial commitment most Indians will make. Choosing the right lender matters as much as choosing the right property. Today, that choice sits between banks and housing finance companies (HFCs), a specialised category of NBFC, and each serves a genuine purpose for different kinds of borrowers.

As of May 2026, banks offer floating-rate home loans starting from 7% for eligible borrowers. HFCs start at 7.15% at their most competitive, but most price between 7.75% and 10%. The gap may appear modest at first glance. On a Rs.50 lakh loan over 20 years, a 1% difference in rate translates to roughly 7.5 lakh in additional interest over the tenure.

The more consequential difference between the tw...