What You'll Learn
- How a home loan for a resale flat differs from one for a new flat, from lenders' terms checked on 31 October 2026
- How the building's age changes your down payment and tenure
- Where GST applies and where it doesn't, from the GST rules
- The extra documents a resale purchase needs, and a worked example that compares cash needed
A home loan for a resale flat costs the same interest rate as one for a new flat, but the building's age can raise your down payment and shorten your tenure. On lenders' pages checked on 31 October 2026, the lowest home loan rate we found was 7.25% at a public-sector bank, and lenders don't publish a separate resale rate. What changes is the margin: one public-sector bank asks for a flat 25% margin on properties older than 10 years, against 10% to 25% on newer ones. A new under-construction flat carries GST of 5% (1% for affordable housing), while a completed flat bought after the completion certificate sits outside GST. This guide comes from MoneyKarma, India's home loan platform with 90+ lenders. Not a lender.
Key takeaway: On an ₹80 lakh flat, the new under-construction option needs ₹16 lakh down plus ₹4 lakh GST; a 15-year-old resale flat with a 25% margin needs ₹20 lakh down and no GST. The cash is the same, but the resale loan is ₹4 lakh smaller and its EMI ₹3,162 lower.
Is the home loan rate different for a resale flat?
No. Lenders price home loans on your credit score, income type and loan size, not on whether the flat is new or resale. Here's what lenders' own pages showed on 31 October 2026. Lenders aren't named, and rates are floating and linked to the RBI repo rate, which is 5.50% after the 7 October 2026 increase.
| Lender type | Rate shown | Who it applies to |
|---|---|---|
| Public-sector bank A | 7.25% | Salaried, credit score 800 and above |
| Public-sector bank B | 7.40% | Credit score 825 and above |
| Public-sector bank S | From 7.50% | Card rate from 15 October 2026 |
| Private bank A | 8.75% to 9.65% | Salaried, loans up to ₹35 lakh, valid to 31 October 2026 |
Compare current offers on MoneyKarma's home loan interest rates page.
How does the age of a resale flat affect your loan?
In two ways: how much the lender funds and how long you get to repay.
Down payment
RBI's loan-to-value limits apply to every home loan: 90% of value for loans up to ₹30 lakh, 80% above ₹30 lakh to ₹75 lakh and 75% above ₹75 lakh. Some lenders go stricter on older buildings. One public-sector bank applies those slabs to new properties and properties up to 10 years old, and a flat 25% margin to properties older than 10 years. On a ₹30 lakh loan, that's the difference between paying 10% and 25% yourself.
Tenure
Another public-sector bank finances an existing house or flat only if it is not older than 40 years and has a remaining life of 10 years more than the loan tenure applied for. Its longest tenure, 30 years or until the borrower turns 75, is for homes not older than 10 years. So a 30-year-old building with an assessed remaining life of 35 years would cap that bank's tenure at 25 years. The lender's valuer, not the seller, decides the remaining life.
Do you pay GST on a resale flat?
Usually not, if the flat is complete. Here's how the GST rules read:
- A new flat bought from a builder before completion attracts GST at an effective 5% without input tax credit, or 1% for affordable housing, from 1 April 2019, according to the Finance Ministry's real estate FAQ.
- Construction sold to a buyer is a taxable service except where the entire consideration has been received after the completion certificate is issued or after first occupation, whichever is earlier. The sale of a building is otherwise outside GST under Schedule III of the CGST Act, 2017.
On an ₹80 lakh under-construction flat, 5% is ₹4 lakh. A resale flat bought from its owner after completion carries no GST. Stamp duty and registration apply to both and vary by state.
What extra documents does a resale flat need?
More paperwork on the property's history. From lenders' lists checked on 31 October 2026:
- Title deeds including the previous chain of property documents
- Title deeds and link documents for the last 13 years, plus an encumbrance certificate for the same 13 years (one public-sector bank)
- Receipts for the initial payments made to the seller, and the agreement to sell if already signed
- KYC documents of the seller
- The approved plan, completion certificate and up-to-date property tax receipts
- A khata certificate or extract, where the city uses one
For a new flat, the list is shorter on history but longer on the builder: the allotment letter or buyer agreement, receipts for payments to the developer, the occupancy certificate and, where the builder took project finance, an NOC from the builder's bank. MoneyKarma's home loan charges and eligibility page lists the costs that come with a loan.
What if the seller still has a loan on the flat?
Then the seller's bank holds the original title deeds. Your lender's legal team will want the seller's loan closed and the deeds released as part of the deal, and the payment order needs to be agreed with both banks before you sign.
A worked example: new or resale at ₹80 lakh
Karthik has two ₹80 lakh options. One is an under-construction flat from a builder. The other is a 15-year-old resale flat in a complete building. His credit score is above 800, and he borrows at 7.25% over 20 years. These are MoneyKarma calculations using the standard reducing-balance EMI formula. Karthik, the prices and the age of the flat are illustrative, and we assume the GST isn't financed.
| Item | New, under construction | Resale, 15 years old |
|---|---|---|
| Loan (80% vs 25% margin) | ₹64 lakh | ₹60 lakh |
| Down payment | ₹16 lakh | ₹20 lakh |
| GST at 5% | ₹4 lakh | None |
| Cash before stamp duty | ₹20 lakh | ₹20 lakh |
| EMI at 7.25%, 20 years | ₹50,584 | ₹47,423 |
| Total interest | ₹57.40 lakh | ₹53.81 lakh |
The cash is identical, but the resale loan is ₹3,162 a month cheaper and saves about ₹3.59 lakh of interest. The new flat has other trade-offs: he'd be paying rent while it's built, and builder delays are a real risk. The resale flat has older fittings and needs a thorough title check.
Which should you choose, a new or resale flat?
- Choose resale if you want to move in now, can check a clean 13-year title chain, and the building is young enough for the tenure you need.
- Choose new if you want a longer tenure on a newer structure, a builder project already approved by banks, and you can carry rent during construction.
- Either way, ask each lender for its margin and maximum tenure on that specific property before you pay a token amount.
