Despite interest rates are coming down, people are still finding it difficult to take a home loan. Reason: Banks now insist that borrowers need to contribute 20-30 % of the value of the property upfront, instead of 10-15 % earlier. As the finance proportion of the banks has come down from 85-90 % of the property value to 70-80 %, borrowers are finding it difficult to go for a home loan.

UCO Bank executive Director TM Bhasin said “as real estate price is declining , banks have increased the buyer's contribution so that the market value of the property should not fall below the loan amount during the course of repayment. He said if the bank lends 85% of the transaction and the market value of the house falls by 20% within six months, the loan amount will become more than the value of the property taken as security.”