Home Loan LTV and the Real Down Payment on a Bangalore Flat

A Bengaluru buyer eyeing a 90 lakh rupee flat does a comforting sum: a home loan covers most of it, so the down payment is small and manageable. Then the bank sanctions 75 percent, the stamp duty and registration land entirely on the buyer, and the real cash needed at the start is closer to 28 or 29 lakh rupees, not the ten the buyer had pictured. The gap is not a trick by the bank. It is how the loan-to-value rules and the excluded charges work, and knowing them early is the difference between a plan and a panic.

The short answer. The Reserve Bank caps how much of a property's value a bank can lend, at up to 90 percent for loans up to 30 lakh rupees, up to 80 percent for loans between 30 and 75 lakh rupees, and up to 75 percent above 75 lakh rupees. Stamp duty and registration are not counted in the value the bank finances, so you pay those yourself on top of the down payment. The trade-off: a higher loan means a smaller upfront outlay but more interest over time, while a larger down payment costs more now and less later.

How much will a bank actually lend against a flat?

A bank can lend up to a ceiling set by the loan-to-value rules, which step down as the loan gets larger. Under the Reserve Bank framework, the cap is up to 90 percent of value for loans up to 30 lakh rupees, up to 80 percent for loans above 30 and up to 75 lakh rupees, and up to 75 percent for loans above 75 lakh rupees. As the ICICI Bank explainer on loan-to-value puts it, lenders are not permitted to finance the full property value, so the loan is always capped and the balance comes from your own funds. The word to hold on to is up to: these are maximums, not entitlements, and your actual sanction can be lower.

So on a flat priced above 75 lakh rupees, plan for the bank to fund at most three-quarters of the value, with the remaining quarter coming from you before any other cost is counted.

Why is the down payment bigger than the headline gap?

Because stamp duty, registration and other documentation charges are not included in the property cost the bank finances. The Reserve Bank's reasoning is that those charges are not realisable, so counting them would dilute the lender's margin, which means the buyer funds them separately from the loan. In Bengaluru, where stamp duty, registration, cess and surcharge add roughly seven and a half percent, that is a substantial sum sitting entirely on your side of the table. Add any GST on an under-construction flat, and the true cash you need at the start is the value-based down payment plus all of these charges. There is a narrow exception: for houses costing up to 10 lakh rupees, banks may add these charges to the cost for computing the ratio, but that does not help a typical city flat.

Housing finance companies can take a different approach from banks on this point, so if you are borrowing from one, ask specifically how it treats stamp duty and registration in its loan calculation. Our guide to stamp duty and registration charges in Bangalore sets out exactly what that seven and a half percent is made of, and if the flat is under construction, our explainer on GST on an under-construction flat covers the further amount that sits outside the loan. When you cost a specific project, say a unit at Mahendra Arto Helix in Electronic City, add the down payment, the duty and any GST together to see the real cash needed at the start.

Is the cap the only thing that decides my loan?

No. The loan-to-value ceiling is an upper limit, but the bank also assesses your repayment capacity and the property itself before settling the amount. Your income, existing obligations and credit history drive how much the bank is willing to lend, and the bank's own valuation of the flat can come in below your agreed price. If the bank values the flat lower than you are paying, the loan is calculated on the bank's figure, not yours, which quietly increases the cash you need. So two buyers of the same flat can get different loan amounts, and the sanctioned figure you should plan around is the lower of the loan-to-value cap and what your income supports. The valuation point deserves attention because it is the one most buyers never see coming. A bank's technical team values the flat on its own basis, and in a market where asking prices have run ahead of recent registered transactions, that valuation can sit below the agreed price. The loan is then calculated on the bank's number, and the shortfall becomes extra cash you must find. Asking the lender early how it will value the property, rather than after the sanction, lets you plan for that gap instead of scrambling for it near registration.

What does the cash requirement look like on a real flat?

The table below works a flat at each slab so you can see how the down payment and the separate charges stack up. The charges column assumes roughly seven and a half percent for Bengaluru stamp duty and registration, and excludes any GST.

How do I plan the cash I actually need?

You start from the value slab, add the statutory charges, and keep a buffer for a conservative bank valuation. The steps below turn that into a plan before you commit.

1. Identify which loan-to-value slab your flat falls into, based on the likely loan amount.
2. Calculate the minimum down payment as the value less the maximum the bank can lend at that slab.
3. Add stamp duty, registration, cess and surcharge, which the bank does not finance, from your own funds.
4. Add any GST if the flat is under construction, since that is also outside the loan.
5. Ask the lender for its valuation of the flat, and plan for a figure below your agreed price.
6. Check that your income and existing obligations support the loan you are counting on.
7. Keep a buffer for incidental costs such as legal fees, so the plan survives a surprise.

Running this sum early, before you fall for a particular flat, is what keeps the purchase on solid ground. The commonest way buyers get stuck is committing a booking amount on the strength of the headline loan figure, then discovering in the final weeks that the down payment, the duty and a conservative valuation together need far more cash than they set aside. Because every one of these numbers can be estimated in advance from the value slab and the state charges, there is no reason to be surprised by them. A plan built on the full cash requirement, rather than the loan alone, is the one that reaches registration without a last-minute shortfall.

Should I borrow the maximum or pay more upfront?

That depends on your cash position and how you weigh interest against liquidity, and there is no single right answer. Borrowing closer to the cap keeps more cash in hand, which can be prudent if you want a reserve for emergencies or the flat needs work, but it means a larger loan and more interest over its life. Paying a larger down payment reduces the loan and the total interest, but it ties up money you might need. The sensible frame is to treat the loan-to-value cap as a ceiling rather than a target, borrow what your repayment capacity comfortably supports, and keep enough aside that the statutory charges and a lower bank valuation do not derail the purchase. This is guidance on how the limits work, not advice on how much to borrow, which depends on your own finances.

Frequently asked questions

How much home loan can I get against a flat in India?

Banks can lend up to a loan-to-value ceiling set by the Reserve Bank: up to 90 percent for loans up to 30 lakh, up to 80 percent for loans of 30 to 75 lakh, and up to 75 percent above 75 lakh. These are maximums, and your actual sanction can be lower based on income and the bank's valuation.

Does the home loan cover stamp duty and registration?

Generally no. Banks do not include stamp duty, registration and documentation charges in the property cost used for the loan-to-value ratio, so you pay those from your own funds on top of the down payment. A narrow exception lets banks include them for houses costing up to 10 lakh rupees, which does not help a typical city flat.

Why is my down payment more than the loan-to-value gap suggests?

Because the stamp duty, registration and any GST sit entirely on you, outside the loan. On a Bengaluru flat the statutory charges add roughly seven and a half percent, and the bank may also value the flat below your price, which raises the cash you need. Your true upfront outlay is the down payment plus all of these charges.

Is the loan-to-value cap the loan I will definitely get?

No. The cap is a maximum, not a guarantee. The bank also assesses your repayment capacity, credit history and the property, and bases the loan on its own valuation. If that valuation is below your agreed price, the loan is calculated on the lower figure, so plan around the smaller of the cap and what your income supports.

The short version: the bank funds a capped share of the value, and the duty, registration and any GST are yours on top. Plan the cash from the slab and the charges together, not the loan alone.

Last updated 2026-10-08. PropNewz Team.