Lesson 1 of 3 · 6 min
The arithmetic nobody shows you first
The price of the flat is not the money you need on day one — the bank lends only a share of it, and stamp duty and registration ride on top of that.
The price of the flat is not the money you need. Banks lend only a share of the price, stamp duty and registration sit on top and are almost never financed, and interiors arrive after possession with a bill of their own.
So the first number to work out is the cash required on day one — the EMI comes second.
How much a bank is allowed to lend (RBI loan-to-value caps)
- Home loan up to ₹30 lakh
- Up to 90% of the property value
- ₹30–75 lakh
- Up to 80%
- Above ₹75 lakh
- Up to 75%
- Stamp duty + registration
- Roughly 4–8% of the price, set by each state
Paid over and above the price, from your own pocket. Several states charge women buyers a lower stamp-duty rate
Your turn
A ₹60 lakh flat. The bank sanctions 80% of it. Your state charges 6% stamp duty and 1% registration. How much cash is needed on day one, in rupees?
Work it out yourself
Run the ₹48 lakh loan that goes with that flat, over 20 years, at whatever rate you enter — and look at how much of year one is pure interest before you look at anything else.
EMI Calculator with Amortisation ScheduleYour turn
That loan at 8.5% over 20 years produces an EMI of ₹43,391. Take-home pay is ₹80,000 a month. What percentage of take-home does the EMI consume?
I have the down payment. Why is that not enough?
KabirTara
Kabirasking
I worked it out. I save my part, the bank lends the rest, and the flat is mine. What am I missing?
Taraexplaining
The state. Stamp duty and registration are charged on top of the price, they come out of your own pocket, and the bank does not lend against them.
Kabirasking
How is that not just part of the price?
Taraexplaining
Because the price is what the seller gets. Stamp duty is what the state charges to record that you now own it. Two different people being paid for two different things.
Kabirasking
Anything else waiting for me on that day?
Taraexplaining
Society charges, the cost of moving, and an empty flat that needs a kitchen. None of that is in the brochure. The cash needed on day one is the first number to work out — the EMI is the second.
Check yourself
1 / 3
Kabir asks
A ₹60 lakh flat. Under RBI's loan-to-value caps, what share of the property value can a bank lend?
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