6 home loan hacks banks don’t disclose to homebuyers; here's how to save big on interest, fees

Buying a home is one of the biggest financial milestones in an Indian’s life, but it’s also one of the longest and costliest financial commitments. While most buyers focus on comparing interest rates and EMI options, many crucial details often get lost in the fine print — or worse, are never disclosed by bank relationship managers (RMs). Financial expert Sujit Bangar, founder of Tax Buddy, recently shared a viral thread on X explaining the “home loan hacks your bank RM never tells you.” His practical insights highlight how borrowers can avoid hidden costs, save lakhs, and make smarter loan decisions.

Here’s a detailed look at the six home loan hacks every borrower should know:

1. Demand full cost disclosure

Most banks advertise low interest rates but conveniently skip mentioning the add-on fees that come later. Charges like processing, legal, technical, valuation, and documentation fees are often presented after loan sanction. According to RBI regulations, banks are legally required to share a detailed cost breakup when asked. So before signing any agreement, insist on a written cost sheet and verify every charge. Hidden fees can quietly inflate your overall cost by several thousand rupees.

2. Don’t fall for “compulsory” insurance

One of the most common traps is being told that buying an insurance policy — often 4% of your loan value — is mandatory for loan approval. In reality, no such rule exists. Borrowers can choose any insurer or opt out altogether. Many bank RMs push bundled multi-year policies, claiming they’re necessary for “tax savings.” But since most taxpayers have already exhausted the ₹1.5 lakh deduction under Section 80C, such insurance often offers little value. Moreover, with more individuals now under the new tax regime, the deduction isn’t relevant.

To stay protected without overpaying, buy a simple term plan independently rather than a bundled loan-linked policy.

3. Apply with two or three banks simultaneously

A common RM strategy is to reveal surprise conditions — like mandatory insurance or last-minute documentation — just before property registration, assuming you won’t restart the loan process elsewhere. To avoid this pressure, apply with two or three banks at once (not more). This gives you leverage to compare terms and switch if a lender changes conditions unexpectedly.

4. Use dual tax deductions smartly

Taking a joint home loan with your spouse or parent allows both co-borrowers to claim tax benefits. Each can avail Rs 1.5 lakh under Section 80C (principal repayment) and Rs 2 lakh under Section 24 (interest payment), totaling up to Rs 7 lakh in annual deductions. This structure also improves loan eligibility and sharing of repayment responsibility.

5. Register in a woman’s name

Many states — including Delhi, Haryana, and Rajasthan — offer reduced stamp duty for women buyers. On a Rs 1 crore property, this can mean savings of up to ₹2 lakh during registration. However, ensure all family and succession documentation is clear to avoid inheritance complications later.

6. Verify the RERA portal and Occupancy Certificate (OC)

Before finalising your home, check the project on your state’s RERA portal for pending approvals, litigation, or promoter delays. Equally important — never take possession without an Occupancy Certificate. Without it, your home isn’t legally fit for habitation and could attract penalties or eviction notices. If the OC isn’t issued, escalate the matter through RERA instead of accepting keys.

For homebuyers

Banks often focus on sales targets, not your savings. By staying informed about costs, tax rules, and compliance documents, borrowers can save lakhs, avoid future disputes, and gain peace of mind. Buying a home may be emotional, but managing a home loan should always be rational.