NRIs are quietly winning big in Indian real estate: Here’s the currency trick powering it
This razor-thin spread in India means that middle-class borrowers are accessing capital at rates nearly equivalent to what the Indian government pays—an economic anomaly that makes mortgage financing exceptionally affordable by international standards.
- Nov 15, 2025,
- Updated Nov 15, 2025 8:57 AM IST
Indian home loan rates are now almost equal to the government's cost of borrowing—making them the narrowest mortgage-to-sovereign spread in the world and giving both resident Indians and NRIs a unique advantage in the global real estate market.
According to market analyst Anubhav Kapoor, top Indian banks like HDFC Bank and State Bank of India are offering home loans at just 7.4 percent, barely 16 basis points above the 30-year Government of India bond yield of 7.24 percent.
“Indian salaried families borrow almost at sovereign rates—a rare global privilege,” Kapoor wrote in a LinkedIn post breaking down the global comparison.
In contrast, the spread between home loan rates and long-term government bonds is much wider in developed economies. In the United States, for instance, the spread stands at 1.6 percentage points, or roughly 35 percent above the sovereign rate. Canada, the UK, and Australia all show similar gaps ranging from 33 to 61 percent.
This razor-thin spread in India means that middle-class borrowers are accessing capital at rates nearly equivalent to what the Indian government pays—an economic anomaly that makes mortgage financing exceptionally affordable by international standards.
Kapoor also pointed to a strategic advantage for non-resident Indians. “NRIs earn in USD, CAD, GBP, or AUD, but invest in Indian real estate priced in INR,” he noted. Since the Indian rupee has historically depreciated by 3 to 4 percent per year against major foreign currencies, this currency movement acts as a tailwind, boosting returns for overseas investors.
The unique convergence of near-sovereign borrowing costs for residents and a currency-linked return edge for NRIs helps explain why Indian real estate remains resilient in the long run. While many global markets have experienced cooling or correction phases, India’s housing sector continues to attract consistent domestic and international interest.
“When a country lets its citizens borrow at government-level rates, and its NRIs invest with a currency tailwind,” Kapoor noted, “you understand why Indian real estate never loses its long-term strength.”
Indian home loan rates are now almost equal to the government's cost of borrowing—making them the narrowest mortgage-to-sovereign spread in the world and giving both resident Indians and NRIs a unique advantage in the global real estate market.
According to market analyst Anubhav Kapoor, top Indian banks like HDFC Bank and State Bank of India are offering home loans at just 7.4 percent, barely 16 basis points above the 30-year Government of India bond yield of 7.24 percent.
“Indian salaried families borrow almost at sovereign rates—a rare global privilege,” Kapoor wrote in a LinkedIn post breaking down the global comparison.
In contrast, the spread between home loan rates and long-term government bonds is much wider in developed economies. In the United States, for instance, the spread stands at 1.6 percentage points, or roughly 35 percent above the sovereign rate. Canada, the UK, and Australia all show similar gaps ranging from 33 to 61 percent.
This razor-thin spread in India means that middle-class borrowers are accessing capital at rates nearly equivalent to what the Indian government pays—an economic anomaly that makes mortgage financing exceptionally affordable by international standards.
Kapoor also pointed to a strategic advantage for non-resident Indians. “NRIs earn in USD, CAD, GBP, or AUD, but invest in Indian real estate priced in INR,” he noted. Since the Indian rupee has historically depreciated by 3 to 4 percent per year against major foreign currencies, this currency movement acts as a tailwind, boosting returns for overseas investors.
The unique convergence of near-sovereign borrowing costs for residents and a currency-linked return edge for NRIs helps explain why Indian real estate remains resilient in the long run. While many global markets have experienced cooling or correction phases, India’s housing sector continues to attract consistent domestic and international interest.
“When a country lets its citizens borrow at government-level rates, and its NRIs invest with a currency tailwind,” Kapoor noted, “you understand why Indian real estate never loses its long-term strength.”