Down Payment
Initial upfront amount paid by buyer from own funds when purchasing property, before taking home loan.
Down payment is the portion of property cost paid directly, not financed by loan. Typically 10-25% of property value per RBI norms.
LTV Ratio Impact
- Property ₹1 Cr, 80% LTV max = ₹20 Lakh down payment minimum
- Higher down payment = lower EMI, better interest rate
Benefits
- Reduces total interest outflow
- Shows lender your commitment
- Lower loan approval risk
Sources for down payment
- Personal savings
- Sell investments
- Family contribution (with proper documentation)
UP Home Loans: Banks like SBI, HDFC offer up to 90% financing for <₹30 Lakh properties, so 10% down payment suffices.
Examples
₹50 Lakh flat with 20% down payment = ₹10 Lakh upfront, ₹40 Lakh loan
Higher ₹15 Lakh down payment saves ~₹2 Lakh interest over 20 years