Short answer: Home loan affordability in Bengaluru improved from an EMI-to-income ratio of 48% in 2016 to 30% in 2021, then slipped back to 35% in H1 2026, on Knight Frank's revised series. That figure predates the October 2026 repo rise. Holding everything else equal, we estimate it at about 35.6% now.
- The long view: 48% in 2016, 30% in 2021, 35% in H1 2026 (Knight Frank's affordability index, revised series).
- The turn came in 2022: the RBI's 250 bps of repo hikes from May 2022 ended the improvement.
- Prices are now the driver: Knight Frank's average Bengaluru price rose 9% to ₹9,354 per sq ft in H1 2026.
- October 2026 adds a little: a 25 bps repo rise lifts a linked EMI by about 1.85%.
- Don't splice old and new series: the old series put Bengaluru at 27% for H1 2025; the revised one says 34% for 2025.
Knight Frank's index measures the share of an average household's income needed to pay the EMI on an average home in the city. Above 50%, banks rarely lend. We've taken its decade of Bengaluru figures, checked what's changed since, and turned it into numbers you can use for your own budget.
How has home loan affordability changed since 2016?
| Year | Bengaluru EMI-to-income ratio | What was happening | Source for the figure |
|---|---|---|---|
| 2016 | 48% | Start of the revised series | Knight Frank press release, as reprinted |
| 2019 | 35% | Incomes rising faster than EMIs | Knight Frank press release, as reprinted |
| 2020 | 33% | Repo cut to decade lows during the pandemic | Knight Frank press release, as reprinted |
| 2021 | 30% | Lowest ratio in the series | Knight Frank press release, as reprinted |
| 2022 | 32% | RBI raised repo by 250 bps from May 2022 | Knight Frank press release, as reprinted |
| 2023 | 32% | Rates held | Knight Frank press release, as reprinted |
| 2024 | 34% | Prices rising | Knight Frank press release, as reprinted |
| 2025 | 34% | 125 bps of repo cuts from Feb 2025 offset price growth | Fortune India |
| H1 2026 | 35% | Prices up 9% in a year | Fortune India, ET Realty |
The 2025 and H1 2026 figures, the city rankings, and the account of improvement from 2016 to 2021 followed by the 2022 rate shock come from Knight Frank's H1 2026 index as reported by Fortune India, 3 Jul 2026 and ET Realty (news). No mainstream outlet we found printed Bengaluru's year-by-year values for 2016 to 2024, so those come from the Knight Frank press release, as reprinted. Knight Frank assumes a 20-year loan, 80% loan-to-value, average home loan rates, a fixed home size per city, and a weighted average price based on unsold stock (press release, as reprinted).
Bengaluru is the fifth most affordable of the eight cities Knight Frank tracks, behind Ahmedabad (23%), Kolkata (25%), Pune (28%) and Chennai (29%). Hyderabad (41%), NCR (67%) and Mumbai (69%) are less affordable. For where prices sit within the city, see our North vs East Bengaluru comparison.
Why do older reports show 26% or 27%?
Because Knight Frank revised its price method. Its 2025 edition put Bengaluru at 26% to 27% for 2021 to 2025 (Housing.com, news). The H1 2026 edition restates 2025 at 34% (Fortune India), and its press release notes the series "reflects updated affordability index level, which accounts for revised methodology on residential prices" (as reprinted).
So a move from 27% to 35% isn't an eight-point collapse. Compare figures only within one edition.
What did the October 2026 repo rise change?
The RBI raised repo from 5.25% to 5.50% on 7 Oct 2026 (RBI). Knight Frank's H1 2026 figure was calculated before that.
On a repo-linked loan priced at repo plus 3%, the rate moves from 8.25% to 8.50%, and the EMI rises 1.85%. With income and price held where they were, 35% × 1.0185 gives about 35.6%. That's our estimate, not a Knight Frank figure. Our repo pass-through tracker shows how and when lenders reset.
Worked examples
These use Knight Frank's H1 2026 average of ₹9,354 per sq ft for a 1,000 sq ft flat, an 80% loan over 20 years, and the approved 8.5% illustrative rate.
Worked example 1: what income does an average flat need?
| Item | Working | Result |
|---|---|---|
| Price | 1,000 × ₹9,354 | ₹93,54,000 |
| Loan at 80% | ₹93,54,000 × 0.8 | ₹74,83,200 |
| EMI at 8.5%, 20 years | standard formula | ₹64,941 |
| Monthly household income for EMI at 35% | ₹64,941 ÷ 0.35 | ₹1,85,546 |
| Monthly household income for EMI at 50% (lender ceiling) | ₹64,941 ÷ 0.50 | ₹1,29,882 |
You'd also need ₹18,70,800 as the 20% down payment, plus about ₹7.1 lakh in stamp charges at 7.6% (calculator). Our full cost guide adds the rest. If you're weighing this against renting, our rent vs buy page and rental yield study show that rent covers about half the EMI in most areas.
Worked example 2: how much do rates matter?
| Rate | EMI on ₹74,83,200 | Income needed at 35% | Change vs 8.5% |
|---|---|---|---|
| 7.5% | ₹60,284 | ₹1,72,240 | −7.2% |
| 8.5% | ₹64,941 | ₹1,85,546 | |
| 9.5% | ₹69,753 | ₹1,99,295 | +7.4% |
| 10.5% | ₹74,711 | ₹2,13,459 | +15.0% |
Each percentage point moves the EMI by about 7% to 8%. A household earning ₹1,85,546 a month would see its EMI share go from 35% to about 40% if rates rose two points.
Worked example 3: price vs rates in the last year
Knight Frank's average price rose from ₹8,906 per sq ft in 2025 to ₹9,354 in H1 2026, about 5%, and 9% on its year-on-year measure. On a fixed loan size and rate, the EMI rises with the price, so 5% higher prices mean a 5% higher EMI. The index moved only from 34% to 35%, so lower rates and income growth absorbed most of it.
The SAFE check: your own affordability (our framework)
| Letter | Question | Rule of thumb |
|---|---|---|
| S: Share of income | What share of take-home pay does the EMI take? | Aim near Bengaluru's 35%; banks rarely go past 50% |
| A: APR stress | Can you pay if your rate rises two points? | Test the EMI at your rate plus 2% |
| F: Fixed costs | Have you added maintenance, tax and other EMIs? | Count every monthly commitment |
| E: Emergency buffer | Will you still have six months of expenses in cash after the down payment? | Don't empty savings to close |
Affordability checklist
- [ ] Work out the EMI on the actual loan, not the price.
- [ ] Divide by take-home income, not gross.
- [ ] Re-run it at your rate plus 2%.
- [ ] Add other loans, maintenance and property tax.
- [ ] Keep six months of expenses after the down payment.
- [ ] Ask your lender how repo changes reset your rate.
- [ ] If you're borrowing with a partner, read our joint home loan page.
- [ ] Check our EMI-to-income budget page.
Frequently asked questions
Knight Frank put Bengaluru's EMI-to-income ratio at 35% in H1 2026, up from 34% in 2025. Below 50% is considered affordable for lending.
No. The ratio fell from 48% in 2016 to 35% in H1 2026 on Knight Frank's revised series. It's been edging up since its 30% low in 2021.
The RBI raised repo by 250 bps from May 2022, pushing EMIs up, and prices have risen since. Rate cuts in 2025 offset part of that.
Slightly. A 25 bps rise lifts a repo-linked EMI by about 1.85%. Holding other things equal, we estimate the index at about 35.6%.
For a 1,000 sq ft flat at ₹9,354 per sq ft, 80% loan at 8.5%, the EMI is ₹64,941. At 35% of income, that's about ₹1.86 lakh a month.
Knight Frank's earlier series used a different price method and put Bengaluru at 26% to 27%. The H1 2026 edition revised it. Don't mix the two.
Knight Frank notes banks rarely lend beyond 50%. Each lender has its own limit, which depends on your income, other loans and credit record.
It depends on rent, price growth and how long you'll stay. On ANAROCK's figures, rent covers about half the EMI in most areas we studied.
Sources
Checked 19 Oct 2026.
- Fortune India, Knight Frank Affordability Index H1 2026, 3 Jul 2026 (news; Bengaluru 35% and 34%, city rankings, 2016–2022 trend): https://www.fortuneindia.com/real-estate/ahmedabad-tops-home-affordability-chart-at-23-as-6-of-8-cities-stay-within-affordability-threshold-in-h1-2026-knight-frank-india/146369
- ET Realty, housing affordability stable in H1 2026, Knight Frank (news): https://realty.economictimes.indiatimes.com/news/residential/housing-affordability-stable-across-major-indian-cities-in-h1-2026-key-insights/132191548
- Knight Frank press release, Affordability Index H1 2026, as reprinted (year-by-year values 2016–2024, assumptions, revised-methodology note): https://www.passionateinmarketing.com/homebuyer-affordability-holds-steady-in-six-out-of-eight-cities-in-h1-2026-knight-frank-india/
- Housing.com, Knight Frank Affordability Index H1 2025, earlier series (news): https://housing.com/news/interest-rate-cuts-boost-affordability-in-h1-2025-report/
- Knight Frank, India Real Estate: Office and Residential Market H1 2026 (Bengaluru average price): https://content.knightfrank.com/research/3116/documents/en/india-real-estate-office-and-residential-market-h1-2026-12927.pdf
- RBI, Monetary Policy Statement, 7 Oct 2026 (repo 5.50%): https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=63742
- RBI, Monetary Policy Statement, 5 Dec 2025 (repo 5.25%): https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=61749
