Gen Z Enters Home Loan Market: Borrowers Aged 25-30 Rise 86 Per Cent In Two Years

The age at which Indians are buying their first home appears to be falling, with younger borrowers making a growing presence in the home loan market.

Data from Kotak Mahindra Bank shows that the number of its home loan borrowers aged 25-30 years rose 86 per cent between FY24 and FY26, from 1,234 to 2,290. Their share of the bank’s individual home loan borrowers increased from 6 per cent to 9 per cent during the same period. By comparison, the number of borrowers in the 30-45 age group grew 26 per cent.

The numbers point to a gradual shift in home-buying behaviour. For earlier generations, buying a house was often a milestone that came after several years of work, marriage and savings. Younger Indians appear more willing to take that step earlier, even if the first home is not necessarily the one they expect to live in forever.

“Homeownership continues to hold a special place in Indian households. What is changing is the age at which people are taking that decision. We are seeing younger borrowers entering the market with greater clarity and confidence than before,” says Nakul Saxena, Head – Home Loans, Kotak Mahindra Bank.

From Waiting For Stability To Building It

For many young professionals, the decision to buy a home is no longer necessarily linked to reaching a particular stage of life. Rising incomes, dual-income households and easier access to home loans can allow some buyers to enter the market earlier.

For some young buyers, the first home does not have to be the final one. They are buying what fits their budget now and leaving the option of moving to a bigger home later.

This makes the first purchase less about finding a “forever home” and more about getting onto the property ladder.

The pandemic may have reinforced this shift. Spending long periods at home made space, privacy, natural light, construction quality and neighbourhood amenities more important considerations for many households. For younger buyers, the experience also blurred the distinction between home, workplace and personal space.

But the decision to buy early is not simply about changing attitudes. For a young borrower, a home loan is a long-term financial commitment, and affordability remains an important constraint. A higher EMI can affect the ability to save for retirement, build an emergency fund or meet other financial goals.

That makes the rise in younger borrowers noteworthy not because buying early is necessarily better, but because it reflects a willingness among some Gen Z buyers to take on a large financial commitment earlier in their working lives.

“What we are seeing is greater conviction. Younger buyers are showing the confidence to act on their aspirations earlier in life rather than waiting years to feel completely settled,” Saxena says.

A Different Route To Homeownership

The changing age profile also reflects the way younger Indians are approaching financial milestones more broadly. They may start investing earlier, use digital financial services more extensively and make large financial decisions with greater access to information than previous generations.

For some families, the decision is also collective. Parents may contribute savings towards the purchase, while a son or daughter takes the home loan. “In dual-income households, two salaries can make a property purchase possible at an earlier age than a single income might have allowed,” Saxena says.

At the same time, the decision to buy a home in one’s 20s or early 30s comes with trade-offs. A young buyer has a longer repayment period ahead but may also have several competing financial priorities, including higher education loans, marriage, children’s education and retirement savings.

For Gen Z, therefore, homeownership may be arriving earlier -but the way they finance and use that first home could be different from previous generations.

Kotak’s data offers an early indication of this change. The 86 per cent rise in its 25-30-year-old home loan borrowers over two years suggests that younger Indians are becoming a more visible part of the housing market.

For a generation often associated with flexibility and mobility, buying a home is becoming an important financial decision earlier in their working lives. The bigger question is not simply whether young Indians want to own a home, but how they balance that aspiration with the other financial goals that come with starting out.