In this article
The down payment is the part of the price you pay from your own money on day one. The rest comes from the loan. A bigger down payment means a smaller loan, a lower EMI and much less interest, but it also uses up cash that you may need for emergencies, furnishing or other goals. The decision is a balance, and the calculator shows both sides.
How the numbers are worked out
- 1Work out the down payment₹50 lakh × 20% = **₹10,00,000**.
- 2Find the loan₹50 lakh − ₹10,00,000 = **₹40,00,000**.
- 3Calculate the EMILoan ₹40,00,000 at 8.75% for 240 months gives **₹35,348** a month.
- 4Add up the totalsEMI × 240 = ₹84.84 lakh. Interest = **₹44.84 lakh**. Total cost with the down payment = **₹94.84 lakh**.
The tool returns the down payment, loan amount, monthly EMI, total interest and total cost.
What each down payment does
| Down payment | Paid now | Loan amount | Monthly EMI | Total interest |
|---|---|---|---|---|
| 10% | ₹5,00,000 | ₹45,00,000 | ₹39,767 | ₹50.44 lakh |
| 15% | ₹7,50,000 | ₹42,50,000 | ₹37,558 | ₹47.64 lakh |
| 20% | ₹10,00,000 | ₹40,00,000 | ₹35,348 | ₹44.84 lakh |
| 30% | ₹15,00,000 | ₹35,00,000 | ₹30,930 | ₹39.23 lakh |
| 40% | ₹20,00,000 | ₹30,00,000 | ₹26,511 | ₹33.63 lakh |
All rows use a ₹50 lakh price, 8.75% interest and 20 years. A bigger down payment cuts the EMI and the total interest in direct proportion to the loan.
Moving from 20% to 30% down saves about ₹5.60 lakh of interest and lowers the EMI by about ₹4,419 a month.
Lender rules set the minimum
Lenders cannot finance the whole price. The Reserve Bank of India's loan-to-value limits for home loans have been tiered by loan size: up to 90% for loans of ₹30 lakh or less, up to 80% above that and up to ₹75 lakh, and up to 75% for larger loans. In plain terms that is a minimum down payment of roughly 10%, 20% or 25%. Check the current rule with your lender, because limits can change.
Banks may ask for more depending on your income, credit score and the property. These are upper limits on what they can lend, not promises.
Putting more down or investing the difference
Paying an extra ₹10 lakh down reduces your loan interest by ₹5.60 lakh over 20 years at 8.75%. Investing the same ₹10 lakh at an assumed 10% a year would grow to about ₹67.3 lakh in 20 years, but that is not guaranteed and is taxed, while the interest you avoid is a certain saving. A loan rate close to or above your realistic investment return favours a larger down payment. A much lower loan rate favours keeping cash invested, as long as you keep an emergency fund.
- EMI falls by about ₹4,419 a month
- A sure saving at the loan rate
- Cash is locked in the property
- Assumes 10% a year, not guaranteed
- Stays available in emergencies
- Returns are taxed and can fall
Neither is always better. A certain saving is worth more than an uncertain gain of the same size.
Choosing your own number
- Find the minimum your lender requires for the loan size you need.
- Keep an emergency fund of at least six months of expenses outside the down payment.
- Add the one-time costs such as stamp duty and registration to the cash you need.
- Check the EMI against your income. Many lenders look at EMIs of up to about 40% to 50% of take-home pay.
- Try three down payments in the calculator and compare the EMI and total interest.
Questions people ask
How much down payment should I make on a home loan?
At least the minimum your lender requires, often 10% to 25% depending on the loan size. A larger down payment lowers the EMI and the total interest. Keep enough cash for emergencies and one-time costs.
How do I calculate the loan amount from the down payment?
Multiply the price by the down payment percentage, then subtract from the price. For a 50 lakh home with 20% down, the down payment is 10 lakh and the loan is 40 lakh.
How does the down payment affect my EMI?
The EMI is proportional to the loan amount at a fixed rate and tenure. Cutting the loan by 25%, for example by raising the down payment from 20% to 40%, cuts the EMI by 25% too.
Does the down payment include stamp duty and registration?
No. Those are separate charges paid on top of the down payment, and the loan usually does not cover them.
Is it better to pay a bigger down payment or invest the money?
It depends on the loan rate, your expected returns, taxes and how much cash you need to keep. A bigger down payment is a certain saving at the loan rate. Investment returns are not guaranteed.
Can I use the calculator for a car or other loan?
Yes. Enter the price, the down payment percentage, the loan rate and the tenure. The Down Payment Calculator works for any loan with equal monthly instalments.