Question 1

What is the minimum down payment for a home loan in India?

Accepted Answer

RBI mandates minimum down payments based on loan size: loans up to ₹30L → minimum 10% down (90% LTV); loans ₹30L–₹75L → minimum 20% down (80% LTV); loans above ₹75L → minimum 25% down (75% LTV). These are regulatory floors — lenders may require more based on credit profile.

Question 2

Should I put more down payment or invest the money?

Accepted Answer

It depends on the opportunity cost. If your home loan rate is 9% and you can reliably earn 12% CAGR in equity, investing the excess is mathematically superior. But consider: home loan is guaranteed interest saved; equity returns are volatile. For most salaried borrowers, a 20% down payment and investing any surplus in SIPs is the balanced approach.

Question 3

Does a higher down payment reduce EMI significantly?

Accepted Answer

Yes — proportionally. Each 5% increase in down payment reduces the loan amount by 5%. On an ₹80L property: 20% down → ₹64L loan → EMI ~₹57,700/mo at 9% for 20y. 30% down → ₹56L loan → EMI ~₹50,400/mo. The difference is ₹7,300/month and roughly ₹17.5L in total interest saved over 20 years.

Down Payment Optimizer