Buying a Home in Mumbai Now Needs 47 Percent of Income Lowest in 15 Years
For the first time in over a decade, buying a home in Mumbai has become relatively more affordable, with residents needing about 47 percent of their household income to cover monthly home loan payments. This marks the lowest affordability ratio in 15 years and reflects falling interest rates and rising incomes. At the same time, housing affordability varies greatly across other Indian cities.
A Rare Shift in Mumbai’s Housing Costs
Mumbai has long been notorious for its steep property prices, often forcing families to dedicate more than half their earnings to mortgage instalments. According to the latest Knight Frank India Affordability Index, the city’s affordability ratio has declined to around 47 percent of household income in 2025. This is the first time it has dipped below the halfway mark since the index began tracking trends roughly 15 years ago, making home ownership slightly less of a distant dream for many middle-class buyers.
This improvement is largely due to a series of policy rate cuts by the Reserve Bank of India, which decreased home loan interest expenses. At the same time, average household incomes are growing at a steadier pace than property prices in many markets, meaning that buyers are not as stretched financially as they were in previous years.
How Other Cities Compare
Across India’s major urban centres, the affordability picture looks quite different. Some cities have become far more welcoming for prospective buyers, while others remain challenging markets:
Ahmedabad stands out as the most affordable among the top eight cities, with households needing about 18 percent of their income to pay home loan EMIs. Pune and Kolkata follow closely, each requiring around 22 percent of income. Chennai is also relatively reasonable at around 23 percent. Further south and west, Bengaluru and Hyderabad sit midrange at roughly 27 to 30 percent.
In contrast, the National Capital Region around Delhi has seen a slight rise in its affordability ratio, pushing it to about 28 percent. This is mainly driven by rising prices in premium and luxury segments, offsetting the benefits of lower borrowing costs. Even so, NCR remains far more affordable than Mumbai in relative terms.
What This Means for Home Seekers
The recent shift in affordability, especially in Mumbai, offers a window of opportunity for buyers who have long felt priced out. Lower interest rates and rising wages have combined to bring the possibility of owning a home into closer reach for many households. At the same time, the stark differences among cities highlight the diversity of India’s real estate landscape. For first-time buyers and families weighing job locations against housing costs, markets like Ahmedabad, Pune, and Kolkata may present more financially sustainable options.
As housing markets evolve and economic conditions shift, affordability will continue to shape the dreams and financial decisions of millions of Indians planning to buy homes in the coming years.
