How much Down Payment for Home Loan?

“How much down payment for house loan?” is one of the important queries that arise when you obtain a home loan. The down payment on a house is the amount you, as the buyer, must pay upfront; the remaining costs of the property are due in the form of monthly payments on your home loan.

How Much Down Payment for a Home?

Banks and other financial institutions can offer up to 90% LTV (loan to value), dependent on the cost of the property, under RBI/NHB guidelines. 

• For properties under Rs. 30 lakh, up to 90% LTV is permitted. 

• For real estate valued between Rs. 30 and Rs. 75 lakhs, up to 80% LTV is permitted.

• Over 75 lakhs worth of property can only have a maximum 75% LTV.

This implies that the buyer of the property must pay the remaining amount as a down payment to qualify for a mortgage.

How Much Downpayment to Buy a House?

No set amount is considered ideal for a down payment on a house loan. Everything is dependent upon your ability to pay. Of course, if you can, putting down 30–40% of the total cost of your home loan can lower the interest rate significantly over time! Now that you know how much down payment for a house, I’d like to say that to minimise your financial burden, you should always speak with the lender about the best amount you can afford to pay as a down payment.

Read More:

I am planning to buy a house in Delhi and I have been working on my finances for quite some time. I had similar doubts a couple of months ago. I happened to talk to a few of my friends who have been on this journey and they helped me know all about down payments. Here are snippets from my knowledge on the subject. Find out minimum down payment for home loan and other important details.

As I put this question in front of my friends, they told me that banks usually provide home loans of up to 80% of the value of the property. So straight up I had to arrange for the rest 20% of the amount as a down payment. 

To verify the fact, I called up my bank and enquired the same. The nice lady told me the exact same thing. She said it further depends on my loan eligibility. If I went for an older house let’s say 15 years or more older, the percentage of bank home loans will reduce. It is set at around 50% of the property rate. 

So now the question for me was, how am I going to arrange money for the down payment? Here are a few suggestions I got:

• Make a budget and set saving goals.

• Limit the expenditure to just essentials

• Prun on variable expenditure such as entertainment and leisure

• Pay off small loans to improve credit score

If you are still doubtful about how much down payment for home, you must contact a property consultant and a financial adviser to guide you through.

These were my insights on minimum down payment for home loan, let me know if this was helpful :)