Home Loan Disbursements in India to Touch Rs 150 Lakh Crore by 2035: Report

Mumbai: India is witnessing a historic upcycle in housing finance, with cumulative home loan disbursements projected to reach Rs 150 trillion (Rs 150 lakh crore) over the next decade, according to a new report released on Thursday.

The report by Omniscience Capital states that a strong convergence of favourable demographics, rapid urbanisation, large-scale infrastructure investment, and sustained policy support is creating one of the most durable structural credit opportunities in India’s financial services sector.

Despite its scale, India’s housing finance market remains significantly under-penetrated, with mortgage penetration at just 11 per cent of GDP, well below global averages. As household incomes rise and urban aspirations expand, the sector is approaching an inflection point, offering substantial scope for long-term, multi-year growth supported by strong structural drivers.

By 2035, India’s urban population is expected to exceed 650 million, with the urbanisation rate rising to 43 per cent. This growth is being fuelled by unprecedented investments in highways, metro rail networks, logistics corridors, and the rapid development of satellite townships. According to the report, this infrastructure-led expansion is significantly widening the addressable housing market, extending demand beyond traditional metropolitan centres.

Government initiatives are also playing a critical role in improving affordability and boosting housing supply. These include PMAY 2.0, which aims to support financing for an additional 30 million homes; SWAMIH 2.0, which targets the completion of 100,000 stalled mid-income housing units; and the Rs 1 lakh crore Urban Challenge Fund, designed to transform Indian cities into future growth hubs.

The report further notes that the continued enforcement of the Real Estate (Regulation and Development) Act (RERA) has enhanced transparency and strengthened buyer confidence across the real estate ecosystem.

Even under conservative assumptions of demand for 40 million urban mortgages and an average home loan size of Rs 38 lakh, the report estimates a cumulative disbursement opportunity of Rs 150 trillion by 2035.

With stronger balance sheets, improving affordability, and clear multi-year demand visibility, the housing finance sector is poised to emerge as a key pillar of India’s next phase of economic growth, the report concluded.

—With inputs from IANS