Before booking a flat, you need more than loan approval — you need cash for down payment, stamp duty, registration and interiors. Banks rarely finance 100% of agreement value. Planning upfront avoids last-minute borrowing at high interest.
What is down payment?
Down payment is your own contribution toward property price. If bank offers 80% LTV (loan-to-value) on ₹50 lakh property:
- Loan = ₹40 lakh
- Down payment = ₹10 lakh (20%)
- Plus stamp duty, registration, GST (if under-construction) — often ₹2.5–4 lakh extra
LTV rules (typical)
- Up to ₹30 lakh property — up to 90% loan possible in many cases
- ₹30–75 lakh — often 80%
- Above ₹75 lakh — often 75%
Exact limits vary by bank, credit score and property type. Self-employed applicants may face stricter norms.
How to plan savings timeline
- Target property budget (e.g. ₹60 lakh)
- Estimate down payment % and government charges
- Add 3–6 month emergency buffer — do not use last rupee
- Monthly saving target = total needed ÷ months until purchase
- Park savings in liquid/short FD until purchase (safety over high risk)
Example
₹50 lakh flat, 20% down = ₹10 lakh. Stamp duty 5% = ₹2.5 lakh. Registration + misc = ₹50,000. Total cash needed ≈ ₹13 lakh before loan disbursement. At ₹25,000/month saving, about 4–5 years — use calculator for your pace.
Common mistakes
- Ignoring stamp duty in down payment math
- Emptying emergency fund completely
- Assuming 90% loan on every property
- Not checking home loan eligibility before paying builder token
Use Master Calc down payment tools
Down Payment Calculator estimates own contribution and savings plan. Check Home Loan Eligibility Calculator for max loan from income. Model EMI with Loan EMI Calculator — free on Master Calc.
FAQ
Can down payment be gifted by parents? Banks allow with gift deed and source documentation — check lender policy.
Is 10% down payment enough? Rare for most buyers. Plan 20–25% of property value plus charges.
Disclaimer: LTV and charges vary by bank and state. Verify before booking property.