The dynamic interplay between monetary policy and housing finance significantly impacts urban development, economic stability, and public welfare. This inquiry delves into how changes in policy rates influence housing loan rates, perceptions of housing finance, and affordability among Bengaluru residents. This research seeks to evaluate the perceptions of Bengaluru residents, offering insights into how changes in policy rates, regulatory adjustments, and economic interventions are felt on the ground level. By exploring the factors influencing residents’ decision-making processes regarding home loan acquisition amidst these fluctuations, the study aims to provide a comprehensive picture of the interplay between monetary policy, housing finance accessibility, and affordability. In order to obtain inclusive information on Bengaluru residents perceptions, a sample size of 144 residents are selected through the random sampling method. Statistical analysis using Factor analysis is adopted in the study. The findings reveal that a direct relationship between monetary policy changes and housing finance, with interest rates being a significant factor affecting their decisions regarding housing finance.