Down payment and total cash needed to buy a home

The short answer

Expect to pay from your own savings at least the part of the price the loan does not cover (the margin money or down payment), plus stamp duty and registration, plus the costs around the deal and the move. For most homes, that is meaningfully more than the down payment alone.

The margin money follows from the Reserve Bank's loan-to-value caps: the loan can be at most 90 per cent of the property's value for loans up to ₹30 lakh, 80 per cent for loans above ₹30 lakh and up to ₹75 lakh, and 75 per cent above ₹75 lakh. So your minimum contribution is 10, 20 or 25 per cent of the price, and more if your income or the lender's valuation supports a smaller loan.

Stamp duty, registration and documentation charges are not counted in the property's cost for the loan, except for homes costing up to ₹10 lakh, so above that they come entirely from your pocket. Add GST for an under-construction flat from a builder, brokerage, the lender's fees, legal checks, society charges, furnishing, moving, and a buffer of several months' EMIs. The worked plans below show how quickly these add up.

Margin money: the part of the price you pay

Margin money is the price minus the loan. The minimum is set by the LTV cap for your loan size; the actual figure depends on what the lender sanctions. If your income supports less than the cap, or the lender values the home below the price, your margin rises.

On an under-construction flat, the margin is paid in stages along with the loan. Lenders typically ask you to pay your own share first, or in proportion, before they release their share for each construction-linked instalment, because disbursement of individual housing loans must be linked to construction stages under RBI rules. Our sanction-to-disbursement guide explains staged disbursement.

The booking amount or token is part of the margin, not extra. But it is usually paid before the loan is sanctioned, so make sure you can get it back, or that the agreement says what happens to it, if the loan is refused.

Stamp duty and registration: almost always your own cash

Stamp duty is a state tax on the sale deed, and registration fees are paid to the sub-registrar. Rates vary by state and, in some states, by the buyer's gender, the property's value or location. Most states charge duty on the higher of the agreed price and the government's guideline value (circle rate or ready reckoner rate). Our stamp duty calculator gives each state's rate.

The Reserve Bank's housing finance rules say lenders should not include stamp duty, registration and other documentation charges in the cost of the property when applying the LTV cap, so that the cap is not diluted. The exception: where the cost of the house does not exceed ₹10 lakh, the lender may add these charges to the cost for the LTV calculation. For anything above ₹10 lakh, plan to pay them yourself.

Some lenders offer a separate loan or a top-up for such costs, or describe a higher loan as 'including' them; read the sanction letter carefully. What the LTV rules allow is the binding constraint, and any extra unsecured borrowing adds an EMI that counts against your eligibility.

GST: only on under-construction homes from a builder

No GST applies to a resale flat bought from its owner, or to a completed flat from a builder where the entire price is paid after the completion certificate or first occupation, whichever is earlier.

On an under-construction residential flat from a builder, GST is 5 per cent without input tax credit for ordinary housing, and 1 per cent for affordable housing (carpet area up to 60 square metres in metropolitan cities or 90 square metres elsewhere, with a price up to ₹45 lakh). These rates were not changed by the GST rate changes effective 22 September 2025. GST is charged on the price after a deemed deduction for land, which is how the effective rates of 5 and 1 per cent are reached.

Lenders generally treat GST on the flat as part of the cost the builder demands, but whether it is financed, and how much, is lender practice. Ask the lender whether it will fund its LTV share of GST instalments or expects you to pay GST from your own money.

The other costs

Brokerage: if you use a broker, the fee is commonly quoted around 1 to 2 per cent of the price, but it is negotiable and varies by city; GST at 18 per cent applies on a registered broker's fee.

Loan costs: the lender's processing fee (with 18 per cent GST), legal and technical valuation charges, and stamp duty on the mortgage document (memorandum of deposit of title deeds or mortgage deed) where the state charges it. Our charges guide lists these. Since 1 October 2024, every charge must appear in the Key Facts Statement the lender gives you before you sign.

TDS: if the price is ₹50 lakh or more, you must deduct 1 per cent TDS from the payment to the seller and deposit it with the government. This is part of the price, not an extra cost, but it must be paid in cash from your side, on time, as our TDS guide explains.

Society and builder charges: a transfer fee or share certificate charge for a resale flat in a cooperative society, maintenance deposits, corpus fund, utility connection charges, club membership and car parking for a new flat. Ask for a full cost sheet in writing.

Moving in: interiors, modular kitchen, wardrobes, appliances, painting, and the move itself. A new flat often needs more than you expect; a resale flat may need repairs.

Insurance: property insurance and, if you choose it, loan protection cover. Insurance is optional; see our charges guide.

Buffer: keep several months of EMIs and household expenses aside after the purchase. A job loss or a rate rise in the first year should not put the home at risk.

Worked cash plan 1: a ₹80 lakh resale flat

Illustrative; assume 8.5 per cent, a 20-year loan, and that the buyer's income supports the full LTV cap. Stamp duty and registration are assumed at 6 and 1 per cent of the price; your state's rates may be different.

Loan: the lender's valuation agrees with the price. A loan of ₹64 lakh would be 80 per cent, within the cap for loans up to ₹75 lakh. Margin money: ₹80 lakh − ₹64 lakh = ₹16,00,000.

Stamp duty at 6 per cent: ₹4,80,000. Registration at 1 per cent: ₹80,000 (some states cap the registration fee). Brokerage at an assumed 1 per cent plus 18 per cent GST: ₹80,000 + ₹14,400 = ₹94,400. Processing fee at an assumed 0.5 per cent of the loan plus GST: ₹32,000 + ₹5,760 = ₹37,760. Legal, valuation and mortgage stamp duty: assume ₹25,000. Society transfer and paperwork: assume ₹25,000. Repairs, painting and furnishing: assume ₹3,00,000. Moving: assume ₹40,000.

Buffer: the EMI on ₹64 lakh at 8.5 per cent over 20 years is about ₹55,541. Six months is about ₹3,33,000.

Total own cash: ₹16,00,000 + ₹4,80,000 + ₹80,000 + ₹94,400 + ₹37,760 + ₹25,000 + ₹25,000 + ₹3,00,000 + ₹40,000 + ₹3,33,000 = about ₹30,15,000. That is about 38 per cent of the price, against a down payment of 20 per cent. The 1 per cent TDS of ₹80,000 is deducted from the ₹80 lakh you pay the seller, so it does not add to the total, but you must deposit it with the government within the deadline.

Worked cash plan 2: a ₹60 lakh under-construction flat

Illustrative; the flat is not affordable housing under the GST definition, so GST is 5 per cent. Assume the same stamp duty and registration rates as above and a loan of ₹48 lakh (80 per cent).

Margin money: ₹60 lakh − ₹48 lakh = ₹12,00,000, paid in stages with the builder's demands. GST at 5 per cent: ₹3,00,000, also in stages. Assume for this plan that the buyer funds GST entirely from savings; some lenders will finance part of it. Stamp duty and registration: in many states these are paid when the sale deed or the registered agreement for sale is executed, often at 6 and 1 per cent of the agreement value: ₹3,60,000 + ₹60,000.

Builder charges for maintenance deposit, corpus and connections: assume ₹2,00,000. Loan costs: assume ₹45,000. Interiors for a bare new flat: assume ₹5,00,000. Buffer: if you are paying rent until possession and pre-EMI interest on the loan as it is disbursed, keep both in the plan; our pre-EMI vs full EMI calculator shows that interest.

Total own cash, before rent and pre-EMI: ₹12,00,000 + ₹3,00,000 + ₹3,60,000 + ₹60,000 + ₹2,00,000 + ₹45,000 + ₹5,00,000 = ₹26,65,000, or about 44 per cent of the price. Our property purchase cost calculator lets you run the same plan with your numbers.

Where the cash should come from

Savings, the sale of another property, and money from family are the usual sources. A gift from a relative is common; keep a bank trail and, for large amounts, a simple gift letter, because the lender may ask where the margin came from.

Borrowing the margin is risky. A personal loan adds an EMI that counts against your home loan eligibility, carries a higher rate, and leaves you with less buffer. Some lenders explicitly prohibit funding the margin with unsecured debt.

Withdrawals from provident fund or a loan against existing investments are possible under their own rules; check the tax and lock-in effects before relying on them. Our PMAY guide covers the government interest subsidy, which reduces the loan over time but does not help with the down payment.

Common mistakes

Budgeting only the down payment and discovering stamp duty and registration at the sub-registrar's office.

Assuming the loan will cover GST, parking or club charges on a new flat without confirming with the lender.

Forgetting the buffer. The first year of ownership is when unexpected costs arrive.

Paying a large booking amount before a loan sanction, with no refund clause.

Taking a personal loan for the margin, which reduces home loan eligibility and strains cash flow.

Not deducting and depositing TDS for a property priced at ₹50 lakh or more. The buyer is responsible for it.

Ignoring the circle rate. If it is above your agreed price, stamp duty is usually charged on the circle rate.

Common questions

Sources

• Reserve Bank of India, Master Circular – Housing Finance (2025-26 edition, rbi.org.in) and the housing finance provisions carried into the consolidated Master Directions of 28 November 2025 — loan-to-value caps of 90 per cent (loans up to ₹30 lakh), 80 per cent (above ₹30 lakh to ₹75 lakh) and 75 per cent (above ₹75 lakh); stamp duty, registration and documentation charges excluded from the property cost except where the dwelling costs up to ₹10 lakh; checked 2 October 2026
• Reserve Bank of India, housing finance instructions on linking disbursement of individual housing loans to the stages of construction (Master Circular – Housing Finance, rbi.org.in); checked 2 October 2026
• Reserve Bank of India, circular of 15 April 2024 on Key Facts Statement for loans and advances, applicable to retail loans sanctioned from 1 October 2024 (rbi.org.in); checked 2 October 2026
• Notification No. 11/2017-Central Tax (Rate) as amended from 1 April 2019, and Schedule III, paragraph 5 of the CGST Act, 2017; residential rates unchanged by the GST changes effective 22 September 2025; checked 2 October 2026
• Income-tax Act, 2025, section 393(1) (TDS on transfer of immovable property, formerly section 194-IA of the 1961 Act); checked 2 October 2026
• Brokerage range: commonly quoted in industry commentary; not a measured figure. Stamp duty and registration rates in the examples are assumptions; see the stamp duty calculator for state rates

Last checked 2026-10-02.