Banks don't decide your minimum down payment arbitrarily — the Reserve Bank of India caps how much of a property's value any lender may finance. This cap is called LTV (loan-to-value), and it depends on your loan size.
The RBI LTV caps
| Home loan amount | Maximum LTV | Minimum down payment |
|---|---|---|
| Up to ₹30 lakh | 90% | 10% |
| ₹30–75 lakh | 80% | 20% |
| Above ₹75 lakh | 75% | 25% |
Example: a ₹60 lakh property with a ₹48 lakh loan sits exactly at the 80% cap — you must bring ₹12 lakh yourself. Ask for ₹50 lakh and every legal lender must refuse, regardless of your income or score.
What the LTV percentage is applied to
The lender applies LTV to the lower of the agreement value and its own technical valuation of the property. If you agreed to pay ₹60 lakh but the bank's valuer pegs it at ₹55 lakh, your maximum loan shrinks to 80% of 55 — ₹44 lakh — and the gap is yours to fund. Importantly, stamp duty and registration charges are generally excluded from the property value for LTV (for most loans above ₹10 lakh), so budget those separately — they add roughly 5–8% in most states.
Beyond LTV: the income test still applies
LTV caps what the property supports; your income caps what you support. Lenders typically want the home loan EMI (plus existing EMIs) within about 50% of net monthly income, and they'll stress-test it. A co-applicant — spouse or parent with income — raises the combined ceiling and is the single most common fix for a shortfall. Tenures run up to 30 years, which lowers EMI but multiplies total interest; prepay when you can (floating-rate home loans to individuals carry no foreclosure penalty).
Practical down payment strategy
- Aim above the minimum. A 20–25% down payment on a sub-₹30L home gets better pricing and a comfortable EMI, and protects you if valuations dip.
- Don't drain to zero. Keep 6 months of EMIs as a buffer after registration — new homes generate surprise costs.
- Avoid funding the down payment with a personal loan. Lenders check for this and it wrecks your FOIR; it's also stacking 11–16% debt under a 8.5–10% asset.
- First home under PMAY-type schemes? Check current government interest-subsidy eligibility before finalising the lender.
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Frequently asked questions
What is the minimum down payment for a home loan in India?
10% for loans up to ₹30 lakh, 20% for ₹30–75 lakh, and 25% above ₹75 lakh — set by RBI's loan-to-value caps. Lenders may ask for more for riskier profiles or properties.
Can stamp duty be included in a home loan?
Generally no for loans above ₹10 lakh — RBI directs lenders to exclude stamp duty and registration from the property value when computing LTV. Budget 5–8% extra for these costs.
Can I take a personal loan for my home loan down payment?
Lenders discourage and often detect it — the new EMI inflates your FOIR and can sink the home loan approval. It also layers expensive unsecured debt under a cheap secured one. Save, use family support, or buy smaller.
Does a co-applicant increase home loan eligibility?
Yes — a co-applicant's income is added to the affordability calculation, often raising the eligible amount substantially. A spouse or earning parent is typical; the co-applicant shares full legal liability.
Solvifin is a loan-comparison and referral platform, not a lender. This guide is general information, not financial advice — final rates, eligibility and approval are always decided by the lender. RBI rules summarised here are simplified; refer to rbi.org.in for the authoritative text.