Mumbai: There was a time, not much long ago, when the foundation of a home for a family in India was laid without much loans or liabilities; it was constructed brick-by-brick, with patience, perseverance, and using personal savings. During the 1960s, 70s, and early 80s, the idea of taking a bank loan to build a house was in vogue.
The Indian middle class used to build their homes slowly and steadily in stages. First, they used to buy a plot, wait for some years to accumulate money and then construct one floor, lend a portion of it to rent, earn more money, and then build another floor. It was a process rooted in simplicity, free of EMI burdens, and the ever-looming shadow of debt.
People often used to work for about 15 – 20 years, save a large portion of their salaries, and plan their construction. There were no real estate advertisements promising luxury lifestyles, no brokers calling with “once in a lifetime” offers. People built what they could afford and not based on what they could borrow from friends, relatives, or other sources.
In Kerala, for example, many families relied on remittances from the Gulf to build homes with local materials and help of local masons. In cities like Mumbai, middle-class families formed cooperative housing societies – groups of teachers, bank clerks, or railway workers who pooled their resources to build modest flats. The process was slower but the house was truly theirs, unencumbered by the claims of a financial institution.
Contrast this with today’s scenario, where owning a home is synonymous with taking a housing loan. The cost of real estate has skyrocketed, especially in urban India, and with it has come the rise of EMI culture. Banks now offer home loans with slick advertisements and easy processing, luring young professionals into decades-long commitments.
What isn’t highlighted enough is the staggering amount of interest one ends up paying, often double the actual cost of the house. For example, a loan of Rs.50 lakhs for 20 years at around 8% interest ends up costing the borrower almost Rs. 1 crore by the time it’s fully repaid. That’s Rs. 50 lakhs in interest, an invisible second house that never becomes yours.
Moreover, today’s homebuyers are mostly working in the private sector, facing the constant uncertainty of layoffs, automation, and economic slowdowns. Job security is a rare privilege, unlike the 1970s when people worked in government jobs or stable public sector undertakings, often retiring with pensions and lifelong benefits.
Back then, there was a strong sense of financial grounding. People knew their limits and didn’t stretch themselves beyond what they could repay comfortably. But in today’s aspirational society, where social media flaunts lavish lifestyles, there is an unspoken pressure to own bigger and better homes, even if it means walking into decades of financial stress.
The purchasing power of the average Indian has paradoxically declined, despite higher incomes. With sky-high property prices, stagnant salaries in many sectors, and rising costs of living, buying a home without a loan has become a near-impossibility for most. But this affordability is often an illusion, built on the foundation of long-term debt. The pride of homeownership is now interwoven with anxiety, as one missed EMI can lead to a downward spiral, not to mention the mental toll of carrying such a burden year after year.
There’s a certain dignity in building a house over time, watching it grow alongside your family and income. It may not come with modular kitchens and vitrified tiles, but it carries with it a sense of achievement untainted by debt. In contrast, buying a ready-made flat through a bank loan might offer instant gratification, but it comes at the cost of years of financial strain and a lifetime of cautious living.
Perhaps it’s time to pause and reflect, to revisit the patient, grounded ways of the past, when homes were not just investments or status symbols, but sanctuaries built with heart, soul, and honest savings.
