Home Loan Down Payment Guide

Before a lender finances your home, you're expected to pay a portion of the property cost yourself — the down payment. Here's how much you actually need, and whether paying more upfront is always the smart move.

How much down payment is required?

In India, lenders typically finance up to 75–90% of a property's value, depending on the loan amount, which means you'll need to arrange 10–25% as down payment from your own funds. Higher-value properties usually require a larger down payment percentage, while smaller loan amounts may allow a smaller one.

What counts toward the "property cost" that's financed

Lenders typically calculate the loan against the property's agreement value, not always the full amount you'll actually spend. Costs like registration, stamp duty, brokerage, and interior work are usually excluded from what the loan covers — meaning your effective out-of-pocket cost is often higher than "10–25% of the flat's price" alone. Budget for these separately.

Is a bigger down payment always better?

A larger down payment reduces your loan amount, which lowers both your EMI and total interest paid — that part is straightforward. But whether to stretch for a bigger down payment depends on a few things:

• In favour of a bigger down payment: lower EMI burden, less total interest, faster loan closure, more equity in the property from day one
• In favour of keeping cash back: maintaining an emergency fund, avoiding depleting all savings for one asset, keeping liquidity for other goals or opportunities

A practical way to decide

1. Keep at least 3–6 months of expenses as an emergency fund — don't use this for the down payment
2. Pay the minimum required down payment, plus a bit extra if it comfortably keeps your EMI within budget
3. Avoid liquidating long-term investments (that are earning well) purely to inflate the down payment, unless the loan interest rate clearly exceeds what those investments earn

See how down payment changes your EMI

Try different loan amounts in the calculator to see exactly how a larger or smaller down payment affects your monthly EMI and total interest.