Minimum Down Payment Required for Home Loan

Owning a house is a dream for most people. If you have already chosen your dream home and found a lender for your home loan, you must be wondering about the down payment. Let’s learn ‘how much down payment for home loan’ needs to be made. 

What is a Home Loan Down Payment?

A home loan is a secured loan provided by banks to purchase a property or a house. Due to the high price of properties, home loans are generally of high amounts. You need to find the right lender whose terms and conditions match your financial situation.

Before you know how much down payment for home loans needs to be made, you need to know what exactly a down payment is. Down payment refers to the lumpsum amount paid from your side before you apply for a loan. 

Usually, lenders approve home loans for 75%-90% of the property price. The remaining amount is to be invested by you and is referred to as the down payment.

How Much Should the Minimum Down Payment for Home Loan Be?

The minimum down payment for home loans is usually 20% of the property price. But the exact amount depends on factors like your credit score, debt-to-income ratio, tenure, and price of the property.

Home loans do not cover 100% of the property value and only 75%-90% of it. The remaining amount is to be paid as a down payment. 

Even though the minimum down payment may vary depending on your case, you can pay a higher amount as a down payment.

Benefits of Making a High Down Payment

Even though making the minimum down payment for a home loan can be enough, there are many advantages of making a higher down payment if you can afford it. The benefits are mentioned below - 

How to Arrange for a Home Loan Down Payment?

Now that you have understood how much home loan down payment you need to make, let’s look at some tips to arrange for the downpayment - 


Making a high down payment while applying for a home loan will reduce your dependency on loans. You will be financially independent and your house will be mortgage-free sooner than if you pay a small down payment.

According to the rules of RBI, most banks fund only 75%-90% of the property value. The remaining amount is supposed to be paid upfront by you.

However, there are some disadvantages to making a high down payment. They are -

You can make use of personal loans in such conditions, to arrange for a down payment or to manage any cash crunch you experience. Instant personal loans from moneyview can come in handy at such times. You can get loans up to Rs.10 Lakh from us with minimal documentation and affordable interest rates.

To know more, please visit our website or download the moneyview app.

Minimum Down Payment Required for Home Loan - Related FAQs

The minimum down payment for a home loan depends on your creditworthiness as well as the property value. In general, 20% of the property value is the minimum down payment required by banks.

The EMI amount of a Rs.30 Lakh loan for 10 years will depend on the interest rate. For example, if your rate of interest is 9% per annum, your EMI will be Rs.38,003. You can this this home loan calculator to calculate your EMI.

According to the guidelines of the Reserve Bank of India, a bank cannot fund 100% of the price of your property. Thus, to get a home loan, you have to arrange for a down payment.

Interest rates for home loans are generally lower than that of personal loans as they are secured loans. The property you purchase acts as the collateral for a home loan. Home loan interest rates start from 8.40% and go up to 14% for most major banks.

The amount of home loan you can get does not depend on your salary alone. Factors like your credit score, the price of the property, your debt-to-income ratio, etc play a role in deciding the loan amount you can get.

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