The short answer
Your down payment is the part of the property's cost that a lender won't fund. The Reserve Bank of India caps the share of a property's value that lenders can finance, known as loan-to-value or LTV. The cap depends on the size of the loan.
| Loan amount | Maximum LTV | Minimum you pay |
|---|---|---|
| Up to ₹30 lakh | 90% | 10% |
| Above ₹30 lakh, up to ₹75 lakh | 80% | 20% |
| Above ₹75 lakh | 75% | 25% |
These are upper limits. A lender may fund less, depending on its own policy and your profile, and it works from its own valuation of the property, which can be lower than the agreed price. If that happens, the gap comes out of your pocket.
What that means in rupees
Here is the smallest down payment on homes at different prices, assuming your income supports the full loan and the lender values the home at its price.
| Property value | Largest loan | Smallest down payment |
|---|---|---|
| ₹30 lakh | ₹27 lakh | ₹3 lakh |
| ₹35 lakh | ₹30 lakh | ₹5 lakh |
| ₹60 lakh | ₹48 lakh | ₹12 lakh |
| ₹1 crore | ₹75 lakh | ₹25 lakh |
| ₹1.5 crore | ₹1.13 crore | ₹37.50 lakh |
Your income can raise the down payment
LTV is only one limit. Lenders also check that your income can repay the loan, and they lend up to the lower figure. In our home loan calculator, a ₹60,000 salary with no other EMIs supports about ₹43 lakh over 20 years at an indicative 8%. On a ₹60 lakh home, the property would allow ₹48 lakh, so the actual gap is about ₹17 lakh rather than ₹12 lakh.
Check both numbers before you shortlist homes. It's much easier to adjust your budget now than after you've paid a booking amount.
Costs on top of the down payment
The down payment isn't the whole cheque. Lenders generally base the loan on the property's value and don't fund these items, so budget for them separately:
- Stamp duty and registration. These vary by state, and sometimes by the buyer or the property. They can add a meaningful percentage to your cost, so check the current rates for your state.
- Loan charges. Processing fees, legal checks and valuation charges vary by lender.
- Other buying costs. Depending on the property, these can include brokerage, society transfer or maintenance deposits, GST on an under-construction home, and home insurance.
- Moving in. Furnishing, repairs and moving aren't part of the purchase, but they use up the same savings.
Should you put down more than the minimum?
A bigger down payment means a smaller loan, a lower EMI and much less interest. Take a ₹60 lakh home financed for 20 years at 8%:
| Down payment | Loan | EMI | Total interest |
|---|---|---|---|
| ₹12 lakh | ₹48 lakh | ₹40,149 | ₹48.36 lakh |
| ₹20 lakh | ₹40 lakh | ₹33,458 | ₹40.30 lakh |
In this example, the extra ₹8 lakh upfront lowers the EMI by ₹6,691 a month and the total interest by about ₹8.06 lakh. That doesn't mean you should use every rupee you have. Keep these aside first:
- An emergency fund. Several months of expenses and EMIs is a common guideline, so a job change or a medical bill doesn't force you to miss a payment.
- Money for near-term goals. Fees, a wedding or a planned purchase may otherwise end up on expensive credit.
- The buying costs above. Work these out before you decide on the down payment, not after.
Floating-rate home loans generally can be prepaid without charges, so you can reduce the loan later as savings build up. See how EMI and prepayment work for what that can save.
Ways to build the amount
- Plan backwards. Add up the down payment and costs, then work out what you'd need to save each month and for how long.
- Be careful about borrowing it. A personal loan for the down payment adds an EMI, which reduces how much home loan you qualify for, and it usually costs more. Lenders may also ask where your contribution came from.
- Consider a co-applicant. A spouse or parent's income can raise the income limit, but it won't change the RBI's LTV cap.
- Look at the price, not just the loan. Near the band limits, a slightly cheaper home can reduce the down payment noticeably.