A balance of home price, mortgage interest rate and household income will determine housing affordability. First, formal housing in Mumbai is unaffordable to the bulk of its population. Around 60 percent of Mumbai’s population lives in slums. Majority of households have incomes that are not in correspondence with the market price of the potential affordable houses. Secondly, providing low cost housing in Mumbai, even at construction rates, does not achieve the target of 70 percent households in formal housing sector. Given the income distribution curve and institutional rates (loan to value, interest rates, savings rate) for the house price has to be 2 lakhs to 2.6 lakhs. Getting a house at that price would be nothing short of magical.