Borrowing From a Housing Finance Company in Chennai? The LTV Caps and the Two Down Payment Plateaus

A family in Chennai shortlists two flats in the same locality. One is priced at Rs 94 lakh, the other at Rs 1 crore. They assume the costlier flat will simply need a slightly bigger loan. When the housing finance company runs the numbers, the maximum loan on both comes out at the same Rs 75 lakh. The extra Rs 6 lakh of price has to come entirely from savings.

That outcome is not a lender's quirk. It follows directly from how the Reserve Bank of India caps loan-to-value, or LTV, for housing finance companies. RBI's Housing Finance Companies Directions, 2025, issued on November 28, 2025 and shown on RBI's site as updated on October 1, 2026, set the limits in paragraph 58. This guide reads that paragraph and turns it into down payment numbers a Chennai buyer can plan around.

The short answer. An HFC cannot lend to an individual above 90 percent LTV on loans up to Rs 30 lakh, above 80 percent on loans above Rs 30 lakh and up to Rs 75 lakh, or above 75 percent on loans above Rs 75 lakh. Stamp duty and registration are kept out of the property cost except for homes costing up to Rs 10 lakh. The trade-off: because the bands are set by loan size, the maximum loan stalls at Rs 30 lakh for flats valued between about Rs 33.3 lakh and Rs 37.5 lakh, and at Rs 75 lakh between about Rs 93.75 lakh and Rs 1 crore. In those bands every extra rupee of price is cash from you.

What exactly does paragraph 58 of the HFC Directions say?

The Reserve Bank of India (Housing Finance Companies) Directions, 2025 bar an HFC from granting loans to individuals in three situations: up to Rs 30 lakh with an LTV ratio exceeding 90 percent; above Rs 30 lakh and up to Rs 75 lakh with an LTV ratio exceeding 80 percent; and above Rs 75 lakh with an LTV ratio exceeding 75 percent.

Read the structure carefully. The thresholds of Rs 30 lakh and Rs 75 lakh refer to the size of the loan, not the price of the flat. The percentage then limits how large that loan can be relative to the value of the property. That is why a buyer cannot simply multiply the flat price by 80 percent and assume that is the loan on offer.

The same Directions also assign risk weights to individual housing loans according to loan size and LTV. Those weights affect how much capital the HFC must hold against your loan. They do not change the caps in paragraph 58.

Why is stamp duty left out of the property cost?

Note 1 to paragraph 58 states that the HFC shall not include stamp duty, registration and other documentation charges in the cost of the house or dwelling unit for working out LTV. In practice, plan to pay them from your own funds, on top of the down payment.

The same note carves out one exception. Where the cost of the house or dwelling unit does not exceed Rs 10 lakh, the HFC may add stamp duty, registration and other documentation charges to the cost for the purpose of calculating the LTV ratio. For most flats in Chennai's mainstream market, that exception will not apply.

For Chennai specifically, plan stamp duty and registration on the value the sub-registrar will apply. Our earlier guide to stamp duty, registration and guideline value for Chennai flat buyers walks through how that value is determined.

Where are the two down payment plateaus?

Because the caps are tied to loan size, the maximum loan does not rise smoothly with property value. The table applies paragraph 58 to five illustrative property values. It treats the value as the figure the HFC accepts for LTV and excludes stamp duty and registration, which you fund separately.

Take the first plateau. A loan of Rs 30 lakh may run up to 90 percent LTV, which supports a property value of up to Rs 33.33 lakh. Any loan above Rs 30 lakh falls into the 80 percent band, and 80 percent of value only exceeds Rs 30 lakh once the value passes Rs 37.5 lakh. Between those two values, the maximum loan is stuck at Rs 30 lakh and the minimum down payment more than doubles, from Rs 3.33 lakh to Rs 7.5 lakh.

The second plateau works the same way. A Rs 75 lakh loan may run up to 80 percent LTV, supporting a value of up to Rs 93.75 lakh. Above Rs 75 lakh the cap is 75 percent, and 75 percent of value only exceeds Rs 75 lakh once the value passes Rs 1 crore. So between about Rs 93.75 lakh and Rs 1 crore, the minimum down payment climbs from Rs 18.75 lakh to Rs 25 lakh while the loan does not move.

How should a Chennai buyer plan cash around these bands?

Start with the full cash requirement, not just the down payment. On a flat valued at Rs 1 crore, the minimum own contribution under paragraph 58 is Rs 25 lakh. Stamp duty, registration and documentation come on top of that, because the Directions keep them out of the cost. If you are looking at a project in the Rs 90 lakh to Rs 1 crore range, such as options around Prestige Park Street in Velachery, the plateau sits squarely in your band.

Next, look at the EMI on the loan you can actually get, not the loan you hoped for. Our recent Chennai piece on EMI math for Rs 50 lakh, Rs 75 lakh and Rs 1 crore loans at a 5.50 percent repo gives the monthly figures at each of these loan sizes.

Finally, understand what the caps are and are not. They are ceilings. An HFC may lend less than the maximum after assessing your income, existing obligations and the property's documents. Paragraph 58 tells you the most you can borrow for a given value; it does not promise that amount. Treat the table as the upper limit of what is possible, and build your plan on the figure your lender actually sanctions.

1. Confirm whether your lender is a housing finance company or a bank, because this article reads only the HFC Directions.
2. Ask the lender what property value it will accept for LTV, and get that figure in writing.
3. Apply the 90, 80 and 75 percent caps by loan size to find your maximum loan.
4. Check whether your property value falls in either plateau band, around Rs 33.33 to Rs 37.5 lakh or Rs 93.75 lakh to Rs 1 crore.
5. Add stamp duty, registration and documentation charges on top of the down payment, since they are excluded from cost.
6. Recompute the EMI on the loan amount the lender actually sanctions.
7. Read the sanction letter and Key Fact Statement for the final loan amount and LTV before paying any booking amount you cannot recover.

Does this mean buyers in the plateau bands should change their budget?

Not necessarily, but they should know they are in one. A buyer at Rs 96 lakh who has Rs 21 lakh saved may find the maximum loan of Rs 75 lakh leaves exactly the down payment needed, before stamp duty. The same buyer at Rs 1 crore needs Rs 25 lakh. Neither choice is wrong. The value of reading paragraph 58 is that the gap shows up on paper before the agreement, not at the disbursement desk.

What about bank home loans?

This article does not quote the bank rules. Banks are covered by separate RBI directions for commercial banks, and those are not what we opened for this piece. If your lender is a bank, ask it to state the LTV it is applying and the property value it is using, and compare that with the sanction letter. The planning method above still helps you spot whether your purchase sits near a band where the loan stops growing.

Frequently asked questions

What LTV limits apply to a home loan from a housing finance company?

Paragraph 58 of RBI's Housing Finance Companies Directions, 2025, updated as on October 1, 2026, bars an HFC from lending to individuals up to Rs 30 lakh with LTV above 90 percent, above Rs 30 lakh and up to Rs 75 lakh with LTV above 80 percent, and above Rs 75 lakh with LTV above 75 percent.

Can stamp duty and registration be included in the property cost for my loan?

Generally no. Note 1 to paragraph 58 says the HFC shall not include stamp duty, registration and other documentation charges in the cost of the house for LTV purposes. The same note allows an HFC to add them where the cost of the house or dwelling unit does not exceed Rs 10 lakh.

Why does my maximum loan stay at Rs 75 lakh for flats between about Rs 93.75 lakh and Rs 1 crore?

Because the caps work on loan size. A loan of exactly Rs 75 lakh may go up to 80 percent LTV, which needs a value of at least Rs 93.75 lakh. Any larger loan falls under the 75 percent cap, which only exceeds Rs 75 lakh once the value passes Rs 1 crore. In that band the loan plateaus.

Do these HFC rules also apply to bank home loans?

This article reads only RBI's Housing Finance Companies Directions, 2025. Banks follow separate RBI directions for commercial banks, which this piece does not quote. If you are borrowing from a bank, ask for the LTV the bank is applying to your case and check it in your sanction letter and Key Fact Statement.

Last updated 2026-11-13. PropNewz Team.