Investor Presentaiton
Mortgage Market in India
HDFC
TAX INCENTIVES HAVE LOWERED THE EFFECTIVE
RATES ON MORTGAGES
FY 2021
FY 2002
FY 2000
Loan amount
3,190,000
3,190,000
3,190,000
Nominal Interest Rate (%)
6.70%
10.75%
13.25%
Max deduction for interest allowed
200,000
150,000
75,000
Deduction on principal
150,000
20,000
20,000
Tax rate
30.90%
31.50%
34.50%
Tenor (years)
20
20
20
Total amount paid per year
363,730
359,400
421,068
Interest component
213,730
342,925
422,675
Principal repaid
150,000
16,475
(1,607)
Tax amount saved
108,150
53,550
32,775
Effective interest paid on home loan
105,580
289,375
389,900
Effective interest on home loan
3.3%
9.1%
12.2%
Note: Union Budget 2021-22: Additional interest deduction of Rs.1.5 lac for loans sanctioned from April 1, 2021
to March 31, 2022. This is for first-time home-buyers; house cost: up to Rs 4.5 mn.
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