In 2026 a Bengaluru couple set their hearts on a 50 lakh flat and assumed the bank would simply lend them the whole amount. It would not. Under the rules that govern home lending, a loan of that size is capped at 80 percent of the property value, so the bank would fund 40 lakh and the couple had to bring 10 lakh of their own, before a single rupee of stamp duty or registration was counted. The gap between what a flat costs and what a bank will lend is the down payment, and understanding it early is the difference between a plan and a scramble.

The short answer. A lender funds only a capped share of a property's value, set by the RBI loan to value bands: up to 90 percent for a home up to 30 lakh, up to 80 percent between 30 and 75 lakh, and up to 75 percent above 75 lakh. The rest is your down payment. The trade off buyers underestimate is that stamp duty and registration sit outside this calculation, so your real upfront cash is the down payment plus those charges, which together can be a large sum on a bigger home.

What is the loan to value ratio?

The loan to value ratio, or LTV, is simply the proportion of a property's value that a lender is willing to finance. If a bank funds 80 percent of a 50 lakh flat, the LTV is 80 percent, the loan is 40 lakh, and you supply the remaining 10 lakh. The ratio exists to keep both sides safe. It ensures you hold a real stake in the home from day one, and it protects the lender from lending more than the property is comfortably worth. Because the home itself is the security for the loan, the LTV is one of the first numbers a lender fixes, and it directly sets the size of the down payment you must arrange.

The LTV also interacts with the value the lender puts on the property, which is not always the price you agreed. A lender funds its LTV percentage of its own valuation, and if that valuation comes in below your negotiated price, the loan shrinks and your down payment rises to fill the gap. This is one more reason to know the guidance value and the fair market value of a home before you commit, so a low valuation does not spring an unexpected cash demand on you close to registration.

What are the RBI caps, and how much must you put down?

The RBI sets caps on how high the LTV can go, and they step down as the loan gets larger. For a loan up to 30 lakh the LTV can reach 90 percent, so your minimum down payment is 10 percent. For a loan above 30 lakh and up to 75 lakh the cap is 80 percent, lifting the down payment to at least 20 percent. Above 75 lakh the cap is 75 percent, so you need at least 25 percent from your own funds. These are ceilings, not entitlements. A lender can and often does offer a lower LTV based on your profile and the property, which means your down payment can be higher than the floor, never lower. The table below lays out the bands.

The example in the last row is the one to remember. A 50 lakh flat sits in the middle band, so the maximum loan is 40 lakh and the minimum down payment is 10 lakh. Move up a band, and the share you must fund yourself grows.

Why do stamp duty and registration sit outside the loan?

Stamp duty, registration and other documentation charges are generally excluded from the property value when a lender computes the LTV, which means you pay them from your own pocket on top of the down payment. The only common exception is a very small property, below about 10 lakh, where a lender may fold these costs in. For almost every Bengaluru buyer, though, the government charges are an extra layer of cash to arrange. On our 50 lakh flat the down payment is 10 lakh, and the stamp duty and registration, covered in our guide to Karnataka stamp duty and registration costs, come on top of that. Treating the down payment as your only upfront cost is the mistake that leaves buyers short at the counter.

What is the true upfront cash you need?

Your true upfront cash is the down payment plus the closing costs, not the down payment alone. Start with the minimum down payment for the property's LTV band, then add stamp duty and registration, the loan processing fee, and any charges the builder levies such as parking, corpus and advance maintenance. On a bigger home these extras can run to a meaningful sum, so building them into your plan from the first day keeps the purchase comfortable. The monthly side of the picture, how the loan translates into an EMI once it is disbursed, is set out in our guide to the EMI math at the current repo rate. Planning the upfront cash and the monthly outgo together is what a careful buyer does before committing.

Should you make a larger down payment than the minimum?

A larger down payment is not always better, and the right size depends on your wider finances. Putting in more than the minimum shrinks the loan, which lowers both your EMI and the total interest you pay over the years, and it can help you win a keener rate. Against that, draining your savings to the last rupee leaves no cushion for the closing costs, the move, and the emergencies that a new home tends to bring. The sensible middle path is to make a down payment large enough to keep the loan comfortable, while holding back a reserve for the duty, the fees and a few months of expenses. This is a personal calculation about your own security, not a race to borrow the least or the most.

Where the down payment comes from matters as well. Lenders prefer to see that your contribution is genuine savings or the proceeds of a clean sale, rather than another loan taken to cover the gap, because stacking a personal loan on top of a home loan strains the very repayment capacity the lender is trying to protect. Building the down payment steadily, well before you shortlist a home, gives you both a stronger application and a calmer purchase.

How should you plan your down payment step by step?

Treat the down payment as a plan to build towards, not a number to discover at the end. Work through the following steps as you shortlist a home.

1. Identify the LTV band your target property falls into, based on its value.
2. Calculate the minimum down payment for that band as a share of the price.
3. Add stamp duty, registration and documentation charges, which the loan will not cover.
4. Add the loan processing fee and any builder charges such as parking and corpus.
5. Confirm the actual LTV your lender will offer, since it may be lower than the cap.
6. Hold back a reserve for the move and for emergencies rather than using every rupee.
7. Total the down payment and all the extras to find the real cash you need upfront.

Run this on the specific home you are considering. For a launch such as Birla Evara, take the quoted price, place it in the right LTV band, and add the duty and fees so the figure you plan for is the true cash to close, not the headline price. The loan is a large help, but it was never designed to cover the whole cost, and knowing that from the start is what keeps a purchase on solid ground rather than turning into a last minute scramble for cash.

Frequently asked questions

What is the loan to value ratio for a home loan?

The loan to value ratio, or LTV, is the share of a property's value that a lender will fund. Under the RBI caps a loan up to 30 lakh can go to 90 percent of value, one between 30 and 75 lakh to 80 percent, and one above 75 lakh to 75 percent. The rest is your down payment.

How much down payment do I need to buy a flat?

Your minimum down payment follows the LTV band of the property. On a home up to 30 lakh you need at least 10 percent, on one between 30 and 75 lakh at least 20 percent, and on one above 75 lakh at least 25 percent. A lender may ask for more, so treat these as floors.

Are stamp duty and registration included in the home loan?

No. Stamp duty, registration and other documentation charges are generally excluded from the property value when a lender calculates how much to lend, so you pay them from your own funds on top of the down payment. Only for a very small property, below about 10 lakh, may a lender include these costs in the loan.

Can I borrow the entire cost of a flat?

No. Lenders fund only a share of the property value, capped by the RBI loan to value bands, and you must bring the rest as a down payment. On top of that you pay stamp duty, registration and other costs yourself, so the cash you need is always your down payment plus those charges, not zero.

The loan to value bands and the treatment of stamp duty described here reflect the RBI guidelines for home loans in 2026, as summarised in this guide to RBI home loan rules. Because caps and lender policies are revised over time, always confirm the current LTV and your own down payment with your bank before you commit.

Last updated 2026-08-11. PropNewz Team.