Home loan down payment and LTV in India

The arithmetic

• LTV = loan amount ÷ value of the property, where “value” is the value the lender accepts for the property.
• Minimum own contribution = value − maximum loan.
• Total cash needed = down payment + stamp duty + registration + other costs of the purchase.

If the lender values the property below the price you agreed, ask whether the loan will be calculated on the lower figure: your own contribution would then be higher.

What the RBI sets

Paragraph 111 (B.6, Quantum of Loan) of the Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025 sets, for individual housing loans:

The same paragraph sets the risk weight for loans up to ₹30 lakh: 35% up to 80% LTV, and 50% above 80% and up to 90%. Paragraph 113 says: “bank shall not include stamp duty, registration and other documentation charges in the cost of the housing property it finances so that the effectiveness of LTV norms is not diluted.” The exemption: “In cases where the cost of the house / dwelling units does not exceed ₹10 lakh, the bank may add stamp duty, registration and other documentation charges to the cost of the house/dwelling unit for the purpose of calculating LTV ratio.” So stamp duty and registration are paid from your own funds, on top of the minimum contribution, except in that case.

These Directions apply to commercial banks. Housing finance companies are regulated separately: ask yours which direction applies. What remains true whatever the slab is:

• the cap is a maximum: the lender may lend less, depending on its own assessment of the property and the borrower;
• the ratio is measured on the cost of the property, not on the total cost including stamp duty and registration.

If the lender quotes a different percentage, ask which RBI direction and which paragraph it comes from.

Costs that come on top of the down payment

See buying under-construction property and GST for the GST detail.

Using the PMAY interest subsidy

If your household qualifies for the interest subsidy of PMAY-Urban 2.0, the loan must not exceed ₹25 lakh and the house value must not exceed ₹35 lakh, and the subsidy is deducted from your principal. It does not replace the down payment. See PMAY-Urban 2.0.

Tax and the down payment

Money you pay towards the purchase is not deductible as such. Under the Income-tax Act 2025, the repayment of principal to a bank and the stamp duty and registration fee paid for the transfer are among the sums that count towards the deduction under section 123 (up to ₹1,50,000 a year), which is available only under the old regime. See home loan tax benefits.

Which professional to consult

A home loan lender can tell you the LTV cap that applies to your loan and how its valuation works. A registered valuer can value the property independently. A property lawyer (an advocate enrolled with the State Bar Council) should read the agreement before you pay any advance.