These cities in India are the most affordable right now, if you’re looking to buy a house

Earlier this month, the Reserve Bank of India (RBI) slashed the repo rate by 50 basis points, bringing it down to 5.5% from its previous level of 6%. So far in 2025, the RBI has already brought down the repo rate by a total of 100 basis points. This spells great news for home loan borrowers, since it means lower monthly home loan EMI payments, and possibly, less number of EMIs (equated monthly instalments) as well.

A recent report by Knight Frank India notes that this rate cut has improved affordability across 7 of the 8 major Indian cities in the first 6 months of 2025. According to the index, Ahmedabad is the most affordable housing market among the top eight cities

Source: Knight Frank India’s Affordability Index, 2025

This ratio refers to the percentage of a household’s monthly income that they should set aside to pay EMIs for their loan taken to buy an average property in that city. For instance, if this ratio comes to 40% for a particular city, it means that households in that city need to set aside 40% of their monthly income to fund their EMI. According to the index, an EMI/ Income ratio over 50% is considered unaffordable.

At 48% EMI/Income ratio, Mumbai is India’s most unaffordable city in terms of buying a house and servicing a loan on the same. As per the index, between 2010 and 2024, the city’s EMI/Income ratio has stayed consistently over 50%, coming down to 48% for the first time in the first half of 2025. This means that households have to set aside approximately half of their monthly income to pay their home loan EMIs for a house in Mumbai.

Ahmedabad, Gujarat recorded the lowest EMI/Income ratio of 18% in the first half of 2025. Households in Gujarat have to set aside around 18% of their monthly income to pay their home loan EMIs. This has come down from 20% in 2024, as the index notes.

According to the index, Kolkata and Pune are 2 cities were EMI/Income ratio has declined in the first half of 2025, as compared to 2024, meaning that households have to set lesser portions of their monthly income aside to pay EMIs for their home loan. In Kolkata, the EMI/Income ratio in 2024 was 24%, which came down to 23% in H1 2025. Similarly, Pune’s EMI/Income ratio stood at 23% last year, which came down to 22% in H1 2025.

In Delhi-NCR, housing affordability has slightly worsened. In H1 2025, individuals need to dish out 28% of their monthly income to service their home loan EMI. This stood at 27% in both 2024 and 2023. Similarly, at 30%, Hyderabad has seen no changes in its EMI/Income ratio since 2022. This means people in the city have to set aside 30% of their monthly income to fund their home loan EMI.