East Bengaluru buyer answers
How much down payment do I need? RBI's loan-to-value limits explained
Direct answer: RBI caps how much of a home's value a bank can lend. For loans up to ₹30 lakh the cap is 90%, above ₹30 lakh up to ₹75 lakh it is 80%, and above ₹75 lakh it is 75%. You pay the rest yourself, plus stamp duty and registration, which banks can't count in the property's value.
Disclosure: acre&key’s advice is free to buyers; we are an authorised sales partner for some projects and may be paid by the developer.
Verify with your CA and lawyer: This page explains RBI's rules for banks. It isn't financial, tax or legal advice. Your lender's sanction letter decides how much it will actually lend you, and your CA should check how the payments fit your tax and cash flow.
It is easy to find out your real down payment late, at the sanction letter or the first demand from the builder. The number isn't always "20%". It depends on the size of the loan, on what the bank counts as the property's cost, and on charges the bank won't finance at all. Working it out early saves a scramble later.
What is the loan-to-value ratio?
The loan-to-value (LTV) ratio is the loan as a share of the property's value. If a bank lends ₹80 on a home it values at ₹100, the LTV is 80%. The remaining ₹20 is your own contribution, which most people call the down payment or margin money.
RBI's Master Circular on Housing Finance (RBI/2025-26/16, 1 April 2025) is addressed to all scheduled commercial banks, excluding regional rural banks. In its paragraph on the quantum of loan, it says banks "should abide by" a set of LTV ratios when deciding how much housing finance to grant.
What are RBI's LTV limits by loan size?
The limits depend on the size of the individual housing loan:
| Individual housing loan | Maximum LTV | What you fund yourself (at least) |
|---|---|---|
| Up to ₹30 lakh | 90% | 10% of the property's value |
| Above ₹30 lakh and up to ₹75 lakh | 80% | 20% of the property's value |
| Above ₹75 lakh | 75% | 25% of the property's value |
The slab is decided by the loan amount, not by the price of the flat. These are ceilings. A bank can lend less than the maximum, for example because of your income, your existing loans or its own policy, so treat the table as the most you could borrow, not what you will get.
Housing finance companies are covered by separate rules, so if you are borrowing from one, ask it which LTV limits it applies.
Why can't the bank finance stamp duty and registration?
The same circular says banks "should not include stamp duty, registration and other documentation charges in the cost of the housing property they finance so that the effectiveness of LTV norms is not diluted."
There is one exception. Where the cost of the house or dwelling unit does not exceed ₹10 lakh, the bank may add stamp duty, registration and documentation charges to the cost when it calculates the LTV. For most flats in Bengaluru, that exception won't apply.
In practice this means stamp duty and registration come out of your own pocket on top of the down payment. Our page on the costs of a flat beyond the base price lists what else to budget for, and our guides to Karnataka's digital e-stamp and registering on Kaveri 2.0 explain how those payments are made.
The circular names stamp duty, registration and documentation charges. It doesn't list GST, car parking, club membership or other charges one by one. Ask your bank in writing which items in your cost sheet it counts in the property's cost, and get the answer before you sign the agreement.
How do I work out my own contribution?
Here is a simple way to do it. The figures below are example numbers to show the method, not prices of any project.
- Take the property cost your bank will use. Ask the bank what it includes.
- Work out the loan at the LTV cap for your slab.
- Check which slab that loan falls in, and use the lower cap if it crosses into the next slab.
- Subtract the loan from the cost. That is your minimum down payment.
- Add stamp duty, registration and documentation charges, which the bank won't count.
- Add the costs the bank won't fund for its own reasons, such as items it leaves out of the cost.
Example 1 (illustration only): a home costing ₹60 lakh. At 80%, the loan would be ₹48 lakh, which is in the ₹30–75 lakh slab, so 80% applies. Your own share is at least ₹12 lakh, plus stamp duty and registration.
Example 2 (illustration only): a home costing ₹1.2 crore. At 80% the loan would be ₹96 lakh, which is above ₹75 lakh, so the 75% cap applies instead. The maximum loan is ₹90 lakh and your own share is at least ₹30 lakh, plus stamp duty and registration.
If your income supports a smaller loan than the cap, your own share goes up. Your bank's eligibility check and sanction letter settle that.
Buying resale? How a home loan for a resale flat works covers the payout.
Does the down payment work differently for an under-construction flat?
The LTV limits are the same, but the money moves in stages. On a construction-linked plan, each demand from the builder can be met partly from your own contribution and partly from the bank's disbursement. Your sanction letter and loan agreement set out the order in which your share and the bank's money are paid, so read them before the first demand arrives.
Our pages on how a home loan for an under-construction flat is disbursed and construction-linked vs time-linked payment plans explain the staging. The same circular also warns banks about schemes where loans are disbursed upfront to builders without being linked to stages of construction, so be careful with any plan that asks for most of the money early.
What should I check before I commit to a flat?
- Your loan slab. Work out whether your loan is under ₹30 lakh, between ₹30 lakh and ₹75 lakh, or above ₹75 lakh.
- The bank's property cost. Ask which items in the builder's cost sheet the bank counts.
- Your cash, all of it. Down payment, stamp duty, registration, documentation, and anything the bank won't fund.
- The payment schedule. Line up when you have to pay your share against when the builder will demand it.
- An in-principle sanction. Get your lender's sanction before paying more than a token amount, and have your lawyer read the agreement's cancellation clause in case the loan falls short.
If you are buying with a co-applicant or from abroad, the lender's documents and eligibility rules change. Our page on how NRIs in the US can buy in Bangalore without travelling covers part of that process.
A sanction letter isn't the same as money paid out; see home loan sanction vs disbursement.
Frequently asked questions
Can I get a 100% home loan in India?
Not from a bank under RBI's LTV limits. The highest cap is 90%, for loans up to ₹30 lakh, and stamp duty and registration can't be counted in the property's cost unless the dwelling costs ₹10 lakh or less.
Is the down payment 20% for every home loan?
No. Under RBI's limits for banks it is at least 10% for loans up to ₹30 lakh, 20% for loans above ₹30 lakh up to ₹75 lakh, and 25% for loans above ₹75 lakh. Your bank can ask for more.
Is the LTV slab based on the flat's price or the loan amount?
The RBI table is set out by the size of the individual housing loan. Work out the loan first, then check which slab it falls in.
Does the bank count stamp duty in the property's value?
Not for most flats. RBI tells banks not to include stamp duty, registration and other documentation charges in the property cost, except where the dwelling costs ₹10 lakh or less.
Do these limits apply to housing finance companies?
This circular is addressed to scheduled commercial banks, excluding regional rural banks. Housing finance companies follow separate rules, so ask your lender which limits it uses.
References
- Reserve Bank of India, Master Circular – Housing Finance, RBI/2025-26/16, DOR.CRE.REC.No.12/08.12.001/2025-26, 1 April 2025, paragraphs on quantum of loan (LTV ratios, exclusion of stamp duty and registration) and innovative housing loan products: https://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=12824, accessed 17 Oct 2026
- Reserve Bank of India, Master Circulars index: https://www.rbi.org.in/Scripts/BS_ViewMasterCirculardetails.aspx, accessed 17 Oct 2026
- Karnataka RERA project search (for checking a project's registration before paying): https://rera.karnataka.gov.in/, accessed 17 Oct 2026
This page explains public rules and processes. It isn't financial, tax or legal advice. acre&key gives buyers advice for free. We are an authorised sales partner for some projects and may be paid by the developer.