Home Loan Down Payment and EMI: How Much Do You Need?
Before you shortlist projects, it helps to know two numbers: how much cash you need up front, and what monthly EMI you can comfortably pay. Here is how to work out both.
How much will the bank lend?
The Reserve Bank of India (RBI) caps a home loan at a share of the property's value, called the loan-to-value (LTV) ratio:
| Loan amount | Maximum loan | Minimum down payment |
|---|---|---|
| Up to ₹ 30 Lakh | 90% of the property value | 10% |
| ₹ 30 Lakh to ₹ 75 Lakh | 80% | 20% |
| Above ₹ 75 Lakh | 75% | 25% |
These are maximums. A bank may lend less, depending on your income, credit score and the project.
Costs the loan does not cover
On top of the down payment, plan for costs that you usually pay from your own savings:
- Stamp duty and registration charges, set by the state government and paid when the agreement is registered.
- GST on under-construction flats. No GST is charged on a flat bought after the occupancy certificate is issued.
- Other charges such as maintenance deposits, society formation, car parking and the loan's processing fee. Ask the developer for a full cost sheet.
Working out your EMI
Your EMI depends on the loan amount, the interest rate and the tenure. For example, a loan of ₹ 40 Lakh at 8.5% a year:
| Tenure | EMI | Total interest paid |
|---|---|---|
| 20 years | about ₹ 34,700 | about ₹ 43.3 Lakh |
| 25 years | about ₹ 32,200 | about ₹ 56.6 Lakh |
A longer tenure lowers the EMI but adds a lot of interest over the life of the loan. Use the EMI calculator on our home loans page to try your own numbers.
How much EMI can you afford?
Banks look at how much of your monthly income already goes on loan repayments. As a rule of thumb, most buyers are comfortable when all their EMIs together stay well under half of their take-home pay, leaving room for living costs and savings. A co-applicant's income can raise the amount a bank will lend.
A quick example
For a flat priced at ₹ 60 Lakh, the loan can be at most 80% (₹ 48 Lakh), so you need at least ₹ 12 Lakh as the down payment, plus stamp duty, registration and other charges. Browse new projects in Pune by budget to find flats in this range.
Frequently Asked Questions
What is the minimum down payment for a home loan in India?
Under RBI rules, at least 10% for loans up to ₹ 30 Lakh, 20% for loans of ₹ 30 Lakh to ₹ 75 Lakh, and 25% above ₹ 75 Lakh. Stamp duty and registration charges are paid on top of this.
Does a home loan cover stamp duty and registration?
Usually not. Banks lend against the property's value, so stamp duty, registration charges and most other costs come from your own savings.
Is a longer home loan tenure better?
A longer tenure gives a lower EMI but costs much more in total interest. Choose the shortest tenure whose EMI you can comfortably afford, and prepay when you can.