Yes, it is mandatory. No lending institution can fund 100% of the cost of the house. Therefore, you must pay a significant amount as a down payment.
While buying your dream house, paying some amount in advance has other benefits too related to EMIs.
What is Home Loan Down Payment?
It is a certain percentage that you have to pay upfront to the seller. The lender evaluates several factors before sanctioning the loan.
What is the Minimum Down Payment Required for Home Loan?
As per the RBI guidelines, a lender can fund up to 90% of the total cost of the property. Alongside this:
– Property below 30 lakh - Maximum 90%
– Property between 30-75 lakh - Maximum 80%
– Property above 75 lakh - Maximum 75%
Benefits of Paying Minimum Down Payment
– It is affordable
– Less stressful for your regular savings
– Helpful in managing the EMIs
Benefits of Paying a Higher Down Payment
– Reduced loan amount, thus, lower liability
– Chances of better interest rates and lower EMIs
– Shorter repayment tenure
Benefits of Paying a Higher Down Payment
– Reduced loan amount, thus, lower liability
– Chances of better interest rates and lower EMIs
– Shorter repayment tenure
Takeaways
Depending on your financial capacity and other expenditure, selecting a down payment is a smart choice. With PNB Housing, you can get the most affordable Home Loans.