Tier-2 and Tier-3 cities recorded an 81 per cent year-on-year progress in dwelling mortgage volumes in 2025, considerably increased than the 52 per cent progress seen in Tier-1 cities, fintech-led mortgage distribution platforms City Cash mentioned in a report.
“This sharp enlargement has elevated the contribution of Tier-2 and Tier-3 markets to 64 per cent of whole dwelling mortgage volumes in 2025, in comparison with 60 per cent in 2024, highlighting a structurally broader and extra distributed housing finance cycle,” it mentioned.
The findings point out that housing demand progress is not concentrated inside a number of massive metros or premium value segments, it mentioned.
As a substitute, it mentioned, bettering infrastructure connectivity, enlargement of employment hubs and sustained availability of mid-income housing are driving stronger homeownership demand throughout rising cities, it mentioned.
As affordability pressures persist in core metros, a rising share of aspirational homebuyers is coming into the market by way of smaller cities and peripheral city corridors, it mentioned.
The report highlighted robust borrower exercise throughout a number of Tier-2 and Tier-3 markets, together with Chandigarh, Jaipur, Surat, Madurai and Palwal, which recorded vital will increase in mortgage creation through the 12 months. The dimensions and consistency of progress throughout these cities mirror deeper penetration of formal housing finance past India’s largest city centres, it mentioned.
City Cash co-founder Amit Prakash mentioned, “India’s housing finance market is turning into extra broad-based and structurally balanced. The present progress cycle is being pushed by regular enlargement in first-time and mid-income homeownership throughout a wider set of cities.
Whereas premium borrowing stays restricted to some high-income markets, the bigger momentum is clearly affordability-led, supported by infrastructure improvement and rising aspirations past core metropolis centres, he mentioned, including that this distributed demand base strengthens the long-term stability of the housing finance ecosystem.
Though rising cities are driving quantity progress, premiumisation stays concentrated in a number of high-income markets. Mumbai, Gurugram and Hyderabad recorded shut to twenty per cent year-on-year progress in common mortgage ticket sizes, it mentioned.
