In a fiercely aggressive housing finance market, public sector banks (PSBs) have emerged because the clear winners within the June quarter of FY26, strengthening their maintain on residence mortgage originations each by worth and quantity. Driving on the again of decrease rates of interest, improved service choices, and government-led affordability schemes, PSBs have considerably outpaced non-public sector lenders.
In keeping with the most recent knowledge from CRIF Excessive Mark, a credit score data bureau, PSBs’ share of residence mortgage originations by worth jumped from 37.6 per cent within the first quarter of FY25 to 46.2 per cent in Q1 FY26, whereas their quantity share rose from 36.5 per cent to 41.9 per cent over the identical interval. In distinction, non-public sector banks witnessed a pointy drop — their worth share declined from 35.2 per cent to twenty-eight.2 per cent, and quantity share slipped from 25.2 per cent to 22.0 per cent year-on-year.
Mortgage origination is the method by which a borrower applies for a mortgage and a lender processes that utility, resulting in the approval, documentation, and disbursal of the mortgage.
The excellent residence mortgage portfolio grew at a gentle 12.8 per cent, reaching Rs 41.2 lakh crore as of June 2026.
Regardless of the dip in market share, non-public banks continued to command the best common ticket dimension at Rs 41 lakh, though this marked a 3.3 per cent year-on-year decline. PSBs got here in subsequent with Rs 35.3 lakh, registering a notable 12.6 per cent improve, whereas Housing Finance Firms (HFCs) reported a mean ticket dimension of Rs 24.6 lakh, up 11.8 per cent over the earlier yr, CRIF Excessive Mark stated.
The expansion in originations worth has been primarily pushed by PSBs, which recorded a progress of 36.1 per cent year-on-year, in comparison with -11.2 per cent degrowth for personal banks, and a 7.1 per cent improve for HFCs in Q1 FY26.
The typical ticket dimension elevated from Rs 30.4 lakh within the June quarter of FY25 to Rs 32.0 lakh in Q1 FY26, and up from Rs 28.0 lakh in Q1 of FY24, indicating a transparent shift towards larger ticket sizes amongst debtors, it stated.
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Some of the putting shifts within the housing mortgage market has been the rise of the Rs 75 lakh-plus mortgage class, which turned the biggest phase by origination worth in Q1 FY26. This phase accounted for 38 per cent of complete residence mortgage worth, up from 33.6 per cent within the June quarter of FY25, overtaking the Rs 5–35 lakh bracket that beforehand led.
Right here too, PSBs stole the highlight, growing their worth share within the Rs 75 lakh-plus phase from 38 per cent to 51 per cent, firmly taking the lead. Non-public banks, however, noticed their share fall from 44 per cent to 33 per cent, whereas HFCs maintained a steady 12 per cent throughout each quarters, CRIF Excessive Mark stated.
Nonetheless, by way of quantity, the Rs 5–35 lakh mortgage vary stays dominant, underlining the persistent demand for inexpensive housing throughout the nation. Analysts counsel this displays sturdy traction in tier 2 and three cities, the place PSBs have a wider attain and higher penetration in comparison with their non-public counterparts.
This shift comes at a time when residence mortgage margins have come below strain, following the RBI’s 100 foundation level lower within the repo charge since February. Regardless of the speed cuts, a number of banks have elevated residence mortgage rates of interest to guard their margins, citing rising funding prices and tight liquidity situations. Consequently, the advantages of the RBI’s accommodative stance haven’t been totally handed on to debtors. Public sector banks, nonetheless, seem to have absorbed a number of the margin strain to take care of aggressive charges, which can have helped them acquire market share within the residence mortgage phase.
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With PSBs aggressively pushing into higher-value loans whereas retaining dominance in inexpensive segments, non-public lenders might have to recalibrate their residence mortgage methods to remain aggressive.
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