How much down payment do I need for a home loan?

Lenders in India typically fund up to around 75 to 90 per cent of a property's value depending on the loan size, so the deposit is the remainder. On top of that you need stamp duty, registration and brokerage in cash, because those are generally excluded from what a lender will fund.

The deposit is not the whole of what you need saved

The figure people plan for is the gap between the property price and the loan. The figure they actually need is that gap plus the state charges plus brokerage plus whatever it costs to make the place liveable. On a mid-sized purchase those additions are frequently as large as the deposit itself, and unlike the deposit they cannot be borrowed.

Regulators also cap lending against property value rather than against price paid, and lenders apply their own valuation. If a lender values the property below the agreed price, the shortfall lands on you, on top of everything above.

What a larger deposit actually buys

A bigger deposit reduces the amount borrowed, and therefore the interest across the term — often by more than people expect, because interest compounds over twenty years. It can also move you into a lower loan-to-value band, where some lenders price the loan slightly differently.

What it does not do is make the house cheaper. The price is the price; a larger deposit changes the split between money paid now and interest paid later. That trade is worth making deliberately rather than by default, particularly if it would empty the savings you would need if your income stopped.

Saving towards it

A deposit is a dated goal with a known amount, which makes it one of the more tractable things to save towards: divide what you still need by the months you have, and you have a monthly figure to test against what you actually keep each month. If the two do not meet, the levers are the date, the amount, or the monthly saving, and it is better to find that out now than at the registration desk.

Keep the money somewhere you can reach on a fixed date. A deposit that has to be liquidated at short notice from something whose value moves is a different kind of problem from the one you were trying to solve.