Planning to buy a home? How much you save upfront matters more than how big a loan you can get.
On an ₹80 lakh flat, paying 20% down (₹16 lakh) instead of 10% (₹8 lakh) cuts your loan by ₹8 lakh — and your EMI by roughly ₹7,000 a month at 8.5% interest over 20 years.
That one choice also saves you about ₹8-9 lakh in total interest over the loan's life.
What this means for you
- Every extra ₹1 lakh you save as down payment lowers your EMI by about ₹875 a month on a 20-year loan.
- A smaller loan means less of your salary locked into EMI for two decades — more room for SIPs later.
- Less loan stress also means more flexibility if your income dips for a few months.
What you can do
- Before house-hunting, set a down payment target of at least 20% and park those savings in a liquid fund or short-term FD so it's ready when you need it.
- If you're already comparing loans, run the EMI math at 10% vs 20% down payment — the gap compounds for 20 years.
The bigger your down payment, the lighter your EMI feels for the next 20 years.
Grow with clarity 🌱