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3 min
01 December 2025

A home loan down payment is the portion of money you contribute from your own pocket when purchasing a house. This amount is paid in advance and helps reduce the total loan you need to borrow from a financial institution. By putting down a reasonable amount, you show lenders that you are financially committed and able to take responsibility for repayments. This helps build trust and may lead to more favourable conditions, such as lower interest charges or flexible repayment terms. In many cases, a higher down payment can help you save more in the long run, as it reduces overall borrowing costs.

What is the down payment on a home loan?

A home loan down payment is the initial amount a homebuyer pays upfront towards the property, while the remaining balance is financed through a loan. It is typically calculated as a percentage of the property price. Although many buyers aim for a 20% contribution, the actual requirement may vary depending on the type of loan, lender’s policy, and eligibility criteria. Paying a down payment reduces your borrowing and signals financial responsibility to the lender.

Planning your home purchase requires careful consideration of both your down payment capacity and loan eligibility. Bajaj Finserv offers competitive rates starting from 7.45%* p.a with loans up to Rs. 15 Crore* to help make your dream home affordable. Check your eligibility today. You may already be eligible, find out by entering your mobile number and OTP.

How much down payment for a home loan should be done

Down payment for home loan is 20% of the property value. According to the RBI rules, lenders in India can only provide 80% of the property value as a home loan for loans above Rs. 30 lakh.

For example, if you want to buy a house of Rs. 40 lakh, then you need to pay minimum 20% of it, that is Rs. 8 lakh.

How the down payment works

A home loan usually involves paying a certain amount in advance, and the remainder is funded by a bank or housing finance company. The size of your down payment affects how much you borrow, your monthly instalments, and the cost of borrowing over time.

1. Determine property value and loan amount

The home’s price is the property value. The lender assesses this value and then decides the maximum amount they can approve based on their lending rules and your eligibility.

2. Calculate the down payment

The down payment is the portion of the property price you must pay from your savings.

Example: If a property costs Rs.40 lakh and the lender finances 80% of it, you will need to contribute 20%, which equals Rs.8 lakh.

3. Lender's guidelines

Banks are governed by loan-to-value regulations, which determine how much of the property’s value can be financed. These rules are set so that lenders do not take excessive risk.

4. Increased down payment benefits

  • Lower interest rates: Paying more upfront reduces risk for lenders and may help you secure better interest rates.

  • Lower EMIs: A smaller loan amount results in reduced monthly repayments, making borrowing more manageable.

  • Faster approval: A healthy upfront payment reflects strong financial behaviour, which can help speed up the approval process and boost your creditworthiness.

A thoughtful down payment strategy can therefore positively influence your loan experience, affordability, and long-term financial comfort.

How to calculate a home loan down payment

Understanding how to work out your home loan down payment helps you prepare financially before applying for a loan. Start by knowing the total cost of the property and then check the loan-to-value (LTV) ratio that the bank is likely to offer. The remaining cost is what you will be required to pay upfront.

Calculation formula

The general method to compute your down payment is straightforward:

Down payment = Total property cost – Sanctioned home loan amount

Example calculation

Here is an illustration using a property priced at Rs.50,00,000:

  • Identify the LTV ratio: Banks can fund up to a certain percentage of the property value. For a house priced over Rs.30 lakh and up to Rs.75 lakh, lenders usually finance up to 80% of the cost.

  • Calculate the loan amount: Multiply the property cost with the LTV ratio.

    • Rs.50,00,000 x 80% = Rs.40,00,000 (Loan sanctioned)

  • Calculate the down payment: Subtract the approved loan from the property price.

    • Rs.50,00,000 – Rs.40,00,000 = Rs.10,00,000 (Down payment)

  • Add other upfront costs: Besides the down payment, you may need to pay various charges such as processing fees, stamp duty, and legal costs.

    • For instance, if the bank applies a 1% processing fee: Rs.40,00,000 x 1% = Rs.40,000

  • Total upfront payment = Rs.10,00,000 + Rs.40,000 = Rs.10,40,000

Planning for these additional expenses is essential to avoid shortfalls and ensure smooth loan processing.

Features and benefits of home loan down payment

Following are the features and benefits of down payment on a home loan

  • Reasonable rate of interest

    Reasonable rate of interest

    Starting from 7.45%* p.a, Bajaj Finserv offers applicants an affordable home loan option to fit their finances.

  • Speedy disbursal

    Speedy disbursal

    No more long waits for loan amounts with Bajaj Finserv. Find your sanction amount in your bank account in just 48* hours from approval.

  • Ample sanction amount

    Ample sanction amount

    Bajaj Finserv provides loan amounts up to Rs. 15 Crore*, to eligible candidate, to boost your home buying journeys.

  • 5000+ project approved

    5000+ project approved

    Find over 5000+ choices in approved projects and enjoy better home loan terms from Bajaj Finserv.

  • External benchmark linked loans

    External benchmark linked loans

     

    By opting for the Bajaj Housing Finance Home Loan linked to an external benchmark, applicants can enjoy reduced EMIs along with favourable market conditions.

     

  • Digital monitoring

    Digital monitoring

    Now keep a close eye on all your loan developments and EMI schedules through the Bajaj Finserv online platform.

  • Long tenor stretch

    Long tenor stretch

    The Bajaj Finserv home loan tenor stretches up to 32 years allowing borrowers a buffer period to plan out their EMI payments.

  • Zero contact loans

    Zero contact loans

    Experience a truly remote home loan application from anywhere in India by applying Bajaj Finserv online home loans and getting an easy approval.

  • No prepayment and foreclosure charge

    No prepayment and foreclosure charge

    Bajaj Finserv allows you to foreclose the loan or make part-prepayments at no extra costs or prepayment penalty – making way for maximum savings.

  • Loan subsidies

    Loan subsidies

    Avail of the loan subsidies offered under the PMAY scheme, with Bajaj Finserv. Approach us for updated terms and best home loan deals.

Benefits of a higher down payment when taking a home loan

Opting for a higher down payment when purchasing a house offers several advantages:

  1. Reduces the risk of negative equity situations, where the property value falls below the mortgage balance

  2. Lowers the likelihood and severity of price declines, enhancing financial security

  3. May eliminate the need for private mortgage insurance (PMI) with a conventional home loan

  4. Reduces the monthly mortgage payments (EMIs) due to the smaller loan amount

  5. Accelerates the loan payoff, helping you become debt-free sooner

  6. Improves your eligibility for better home loan interest rates and terms

  7. Especially beneficial if you have a lower credit score, as it increases the likelihood of loan approval

  8. Demonstrates strong financial discipline, enhancing your creditworthiness, which can be checked through your CIBIL Score

Whether you opt for a higher or standard down payment, securing the right home loan with favourable terms is crucial for your financial well-being. A home loan from Bajaj Finserv provides flexible repayment options up to 32 years and quick approval within 48 hours*. Check your loan offers with Bajaj Finserv now. You may already be eligible, find out by entering your mobile number and OTP

How to plan for a down payment on a home loan?

Planning ahead can make it easier to arrange the down payment for your home. Here are some steps to help you prepare:

  • Start saving early: Allocate a part of your income each month specifically towards your future home purchase.

  • Use investment options: Consider fixed deposits (FDs) or start a Systematic Investment Plan (SIP) to steadily build your down payment fund.

  • Utilise extra income: Bonuses, tax refunds, or side earnings can be set aside to add to your savings.

  • Set a target: Understand the expected minimum down payment amount so that you can set a realistic savings goal and stay on track.

Although down payments can differ based on the cost of the home and the lender’s rules, having a clear savings plan helps you stay prepared. With careful financial planning, the process becomes more manageable. If needed, you can reach out to lenders like Bajaj Finserv for personalised guidance, customised loan plans, and a smoother home loan experience.

Factors that influence your down payment

The percentage of down payment required differs depending on multiple factors, and understanding them helps you estimate how much you need to save in advance.

Property value

The bank determines your LTV based on the home’s price.

  • Up to Rs.30 lakh: LTV may be up to 90%, so buyers might need at least a 10% down payment.

  • Above Rs.75 lakh: LTV could be around 75%, which may require a minimum 25% contribution.

Credit score

Strong credit history can improve your borrowing power and may help negotiate better terms. A high score signals reliability, sometimes resulting in a lower down payment requirement.

Borrower profile

Lenders assess factors like salary, job stability, age, and current debts. Applicants with steady income and fewer liabilities have a higher chance of favourable terms.

Lender’s policies

Different lenders have internal policies that affect loan amounts, risk assessment, and down payment criteria. These may change depending on economic conditions, market trends, and business strategy.

How to accumulate funds for your down payment

Saving for a down payment requires planning, discipline, and a structured approach. Building funds gradually ensures you are financially prepared when you decide to purchase property.

Build a corpus

Start saving early to avoid stress later. Setting aside a portion of your earnings every month can help you accumulate a sizeable fund over time.

  • Automate savings: Set up automatic transfers into a dedicated account to ensure consistent contributions without relying on memory.

  • Improve credit score: A good score not only improves loan eligibility but can also help you access cheaper loans or smaller down payments.

  • Consider unsecured loans (with caution): A personal loan may help you bridge funding gaps, but it adds to your debt load and usually carries higher interest rates. Borrow only if necessary and manageable.

How to save for a home loan down payment?

1. Set a goal

Decide when you want to buy a house, such as within 5 or 10 years. Based on this timeline, plan your monthly savings. Consider safer investments such as Fixed Deposits, Recurring Deposits, National saving schemes, or low-risk mutual funds depending on your comfort level.

2. Start budgeting

Create a realistic monthly budget that allows space for savings. You may follow the 50/30/20 rule, where:

  • 50% goes to essentials,

  • 30% towards lifestyle,

  • 20% towards savings and investments.

Modify the distribution but ensure savings remain consistent.

3. Automate savings

Automatic transfers prevent delays or missed contributions. You may also consider SIPs or deposits to systematically build a fund. Automation builds discipline and gradually creates a substantial amount for your down payment.

Conclusion

Understanding home loan down payments is the first step towards successful home ownership. With the right preparation and a clear savings strategy, you can confidently approach your property purchase knowing exactly what to expect financially.

The key is to start planning early, compare different lenders, and choose a financing option that aligns with your budget and long-term goals. Whether you are a first-time buyer or looking to upgrade, having a solid grasp of down payment requirements will make your home buying journey smoother and more predictable

Your home ownership journey deserves a reliable financial partner who understands your needs. Bajaj Finserv combines competitive interest rates with flexible terms to support your property dreams. Check your loan offers today. You may already be eligible, find out by entering your mobile number and OTP.

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Frequently asked questions

Can I get a 90% home loan?

Banks and financial institutions in India offered home loans with a maximum loan-to-value (LTV) ratio of up to 90%. This means they could provide a home loan covering up to 90% of the property's value, and you would be required to make a down payment of at least 10% of the property's cost. However, lending policies and regulations can change over time, and different lenders may have varying requirements.

How to plan the down payment for a home loan?

To effectively plan for a down payment on your home loan, start by evaluating your financial situation, setting a clear budget, and calculating the required down payment amount based on your home-buying goals. Establish a savings goal and a timeline for achieving it and consider cutting unnecessary expenses to boost your monthly savings.

How much down payment required for home loan?

The down payment required for a home loan typically varies based on factors like the type of loan, lender policies, and the borrower's profile. Conventional home loans usually necessitate a down payment of 10% to 20% of the property's purchase price, but lower down payment options are available, such as those offered under government schemes like Pradhan Mantri Awas Yojana (PMAY) or affordable housing loans with down payments of 5% to 10%. Down payment requirements may change over time and vary by location, lender, and specific loan products. To determine the exact down payment for your home loan, consult with your chosen lender or a mortgage specialist for up-to-date information and eligibility criteria.

Can I get 100% home loan?

It is generally challenging to obtain a 100% home loan, as most lenders require a down payment. However, certain government schemes like Pradhan Mantri Awas Yojana (PMAY) and affordable housing loans may offer reduced down payment options. Additionally, co-applicants or guarantors with strong financial profiles can help increase the loan amount. Lender-specific programs may also provide higher loan-to-value (LTV) ratios. Eligibility criteria and loan terms can vary, so it's recommended to explore different lenders and government incentives and consult with lenders to understand their current down payment policies.

How much home loan can I get on Rs. 70,000 salary?

The amount of home loan you can get in India on a salary of Rs. 70,000 per month will depend on various factors, including the lender's policies, your creditworthiness, and the prevailing interest rates. Lenders typically use a Debt-to-Income (DTI) ratio to assess your loan eligibility, which helps determine the maximum EMI (Equated Monthly Installment) you can comfortably pay based on your income.

Here's a simplified calculation:

Monthly Salary: Rs. 70,000

Assuming a DTI ratio of 50%, your maximum total EMI would be: (50% of Rs. 70,000) = Rs. 35,000

To calculate the maximum home loan amount, you can use this formula:

Maximum Home Loan Amount = (Maximum total EMI / EMI per lakh)

How much is a down payment on a Rs. 50 lakh house?

If you're planning to buy a home worth Rs. 50,00,000, you may need to make a down payment of around 20%, which is Rs. 10,00,000. The remaining amount, Rs. 40,00,000, would be covered by the home loan. Keep in mind, lenders may also charge a processing fee, usually 1% of the loan amount—around Rs. 40,000 in this example.

 

When planning for such a significant investment, it is essential to secure pre-approved financing to streamline your property search. A home loan from Bajaj Finserv offers processing fees up to 4% and competitive rates to help you budget effectively. Check your eligibility for Bajaj Finserv now. You may already be eligible, find out by entering your mobile number and OTP.

Can you get a home loan for a down payment?

It’s unlikely you’ll find a loan specifically meant to cover a down payment. While some personal loans could technically be used for this purpose, they often come with high interest rates and risks. Instead, it’s better to look for lenders offering home loans with lower down payment requirements or flexible terms to reduce the upfront burden.

Can we get a home loan for 100% of the property value?

No, you cannot get a full 100% home loan in India. As per RBI rules, lenders can only finance up to 90% of the property's value. This means you must arrange the remaining 10% or more as a down payment from your own funds before the loan is approved and disbursed.

 

While 100% financing is not available, choosing the right lender can significantly impact your down payment requirements and overall loan experience. Bajaj Finserv offers home loans up to Rs. 15 Crore* with attractive terms to minimise your financial burden. Check your loan offers today. You may already be eligible, find out by entering your mobile number and OTP.

How much is a typical down payment?

Usually, down payments for home loans in India range between 10% and 20% of the property's price. This upfront amount is mandatory before the lender releases the loan. The exact percentage may depend on your credit score, the lender’s policies, and the type of property. A higher down payment reduces the loan size and overall interest costs.

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