NRIs Capitalize on Currency Trends to Dominate Indian Real Estate
NRIs are leveraging a unique currency advantage to invest in Indian real estate, making it an attractive option despite global market challenges.
NrisReal EstateMortgage RatesCurrency TrendsInvestmentReal EstateNov 15, 2025
Increasingly, NRIs are benefiting from the narrowest mortgage-to-sovereign spread in the world. This refers to the type of mortgage where the property is pledged as security for a loan term, with the government acting as the lending body.
Top Indian banks like HDFC Bank and State Bank of India are offering home loans at just 7.4 per cent, which is merely 16 basis points above the government of India’s 30-year bond yield of 7.24 per cent. “Indian salaried families borrow almost at sovereign rates—a rare global privilege,” Kapoor noted in a LinkedIn post, highlighting a global comparison.
In developed economies, the spread between home loan rates and long-term government bonds is significantly wider. According to Kapoor, the spread stands at 1.6 percentage points or roughly 35 per cent above the sovereign rate in the United States. A similar gap of 33-61 per cent is observed in Canada, the UK, and Australia.
A minimal spread in India is allowing middle-class citizens to access and acquire real estate at rates nearly equivalent to what the Indian government pays. This scenario makes India an economic anomaly, where mortgage financing is highly affordable by international standards, making it easier for NRIs to invest.
“NRIs earn in USD, CAD, GBP, or AUD, but invest in Indian real estate priced in INR,” Kapoor explained. This gives rise to an advantageous strategy for NRIs. As the Indian currency has historically depreciated by 3 to 4 per cent annually against foreign currencies, it boosts profitability for investors based overseas.
At a time when many global markets have experienced cooling or correction phases, India’s housing sector continues to be resilient and attracts both domestic and international interest. The key here is the unique convergence of near-sovereign borrowing costs for Indians and currency-based return advantages for NRIs.
The Indian real estate market is not just benefiting from low interest rates but also from the broader economic stability and growth. NRIs are leveraging these factors to secure valuable assets in India, making it a compelling investment option despite the global economic uncertainties.
For NRIs, the combination of low mortgage rates and favorable currency trends provides a dual benefit. Not only do they pay less in interest, but the depreciation of the Indian rupee against their home currencies further enhances their returns. This makes Indian real estate an attractive and lucrative investment for NRIs looking to diversify their portfolios.
In conclusion, the unique economic conditions in India, particularly the low mortgage rates and currency trends, are providing NRIs with a significant advantage in the real estate market. As the global economic landscape continues to evolve, the Indian real estate sector remains a promising and resilient option for both domestic and international investors.
Frequently Asked Questions
What is the current home loan rate in India?
Top Indian banks like HDFC Bank and State Bank of India are currently offering home loans at just 7.4 per cent.
How does the home loan rate in India compare to government bond yields?
The home loan rate in India is just 16 basis points above the government of India’s 30-year bond yield of 7.24 per cent.
What is the mortgage-to-sovereign spread in developed economies?
In developed economies like the United States, the spread is 1.6 percentage points or roughly 35 per cent above the sovereign rate.
How does currency depreciation benefit NRIs investing in Indian real estate?
The Indian currency has historically depreciated by 3 to 4 per cent annually against foreign currencies, which boosts profitability for NRIs investing in Indian real estate priced in INR.
Why is the Indian real estate market attractive for NRIs despite global market challenges?
The combination of low mortgage rates and favorable currency trends provides NRIs with a significant advantage, making Indian real estate a resilient and lucrative investment option.
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