Pehle ghar ka budget: down payment, home loan and hidden costs for a first home (2026)
Design IRL Editorial · Figures checked 15 November 2026 · For first-time buyers working out what they can afford, including couples buying together and buyers who may qualify for PMAY · How we make our guides
Most first homes in India are bought with a loan: in Knight Frank's survey of urban buyers, 79% preferred to use one. But the bank funds only 75–90% of the price, so for a ₹50 lakh flat you need about ₹14–16 lakh of your own before interiors: the down payment, stamp duty, registration, GST on an under-construction flat, and fees. Plan the cash first, then the EMI.
How first homes are paid for
Few people buy their first home outright. In Knight Frank's 2024 survey of 1,629 urban homebuyers, 79% preferred a home loan, and in ANAROCK's survey of about 8,250 people in the first half of 2025, 87% said they were more likely to take one. Outstanding individual home loans stood at ₹33.53 lakh crore in September 2024, up 14% in a year, according to the National Housing Bank.
So the real questions are: how much cash do I need, kitna loan milega, and EMI kitni banegi? The table below shows how the bank's share and yours are split.
| Loan amount | Most the bank can fund | Your share at least |
|---|---|---|
| Up to ₹30 lakh | 90% | 10% |
| ₹30–75 lakh | 80% | 20% |
| Above ₹75 lakh | 75% | 25% |
The cash you need beyond the down payment
- Stamp duty and registration: about 5–9% of the value in most states, registration included, paid from your own money. Several states charge women less.
- GST on an under-construction flat: 5%, or 1% on an affordable home (up to ₹45 lakh and 60 sq m carpet in metros, 90 sq m elsewhere). None on a ready flat with a completion certificate, or on resale.
- Loan processing fee: often up to about 0.5% of the loan, plus 18% GST, and legal and valuation charges.
- Builder charges not in the headline price: parking, preferred location charges, club membership, and maintenance deposits of one or two years.
- Interiors: about ₹6.3–11.7 lakh for a 900 sq ft 2 BHK at essential finish in metros, before GST.
- Moving, and an emergency fund of at least six months of EMI and expenses.
Ask for the all-in price
Ask the builder for the total cost sheet, everything you'll pay until possession, and compare projects on that, not the price per sq ft in the advert.
What EMI your income supports
Banks usually let all your EMIs together reach about 40–55% of income. That's the most they'll lend, not what's comfortable. Knight Frank treats an EMI above 50% of income as unaffordable, the level beyond which banks rarely lend. For a first home, aim for an EMI of about 30–40% of take-home pay, so you can still save, handle a rate rise and pay for the home's running costs.
| Monthly EMI | Loan it supports at 7.75% over 20 years |
|---|---|
| ₹20,000 | About ₹24 lakh |
| ₹30,000 | About ₹37 lakh |
| ₹40,000 | About ₹49 lakh |
| ₹50,000 | About ₹61 lakh |
Rates move. The RBI raised the repo rate by 0.25 points to 5.50% on 7 October 2026, and most home loans are floating, so your EMI or tenure can change. Leave room for that.
A worked example: a ₹50 lakh first flat
A couple in a tier 2 city take home ₹1,00,000 a month between them, with no other EMIs. They like a ₹50 lakh under-construction 2 BHK.
- Loan: ₹40 lakh, 80% of the price, which is in the ₹30–75 lakh band. At 7.75% over 20 years the EMI is about ₹32,800, 33% of their take-home pay. Comfortable.
- Down payment: ₹10 lakh.
- Stamp duty and registration: about ₹3–3.5 lakh in most states, less if a woman is the owner in states with a concession.
- GST at 5%: ₹2.5 lakh, since ₹50 lakh is above the affordable-housing limit. A ready flat with a completion certificate would carry none.
- Processing fee and charges: about ₹25,000–50,000.
- Total own cash before interiors: about ₹16 lakh. Interiors add ₹6 lakh or more, and they should keep an emergency fund of about ₹3 lakh untouched.
Saving up for it
₹16 lakh is about five years of saving ₹25,000 a month, before any returns. Start a separate account or investment for the ghar fund, and don't count money you might need for something else.
PMAY: the government subsidy for a first home
The Interest Subsidy Scheme under Pradhan Mantri Awas Yojana – Urban 2.0 helps lower- and middle-income families buy their first pucca home in a town or city.
| Rule | PMAY-U 2.0 interest subsidy |
|---|---|
| Household income | Up to ₹9 lakh a year: EWS up to ₹3 lakh, LIG ₹3–6 lakh, MIG ₹6–9 lakh |
| Home and loan | Home worth up to ₹35 lakh, loan up to ₹25 lakh, carpet area up to 120 sq m |
| Subsidy | 4% on the first ₹8 lakh of the loan, worked over up to 12 years; at most ₹1.80 lakh |
| How it's paid | Into your loan account in five yearly instalments |
| Who qualifies | The family must not own a pucca house anywhere in India; loans sanctioned on or after 1 September 2024 |
| Ownership | In the name of the woman head of the household, or jointly with her, where there is an adult woman in the family |
Buying together: couples and families
- A joint loan counts both incomes, so the bank lends more. Both are then liable for the whole EMI.
- Stamp duty is lower in several states when a woman is an owner. The concession usually applies only if she is a named owner, not just a co-borrower.
- Tax: under the old tax regime, each co-owner who is also a co-borrower can claim up to ₹2 lakh of interest a year on a self-occupied home, and principal within the ₹1.5 lakh limit for such investments. The new tax regime gives no interest deduction on a self-occupied home.
- The Income-tax Act, 2025 applies from 1 April 2026 and renumbers these sections. Ask your CA which regime suits you.
- If parents help with the down payment, record it as a gift or a loan in writing.
Money mistakes to avoid
- Taking the largest loan the bank offers rather than the EMI you can live with.
- Choosing a 30-year tenure only for the lowest EMI. On ₹40 lakh at 7.75%, 30 years cuts the EMI to about ₹28,700 but adds about ₹24 lakh of interest compared with 20 years.
- Forgetting GST, stamp duty and builder charges when comparing flats.
- Paying rent and an under-construction EMI together for longer than you planned. Ask the bank about pre-EMI and plan for delay.
- Skipping term life insurance on the main earner. A first home loan is a long promise.
Check before you commit
Rates, GST, stamp duty, PMAY and tax rules change. Everything here is as of November 2026 and for planning only; confirm with your bank, the state's registration department and your CA.
Common questions
How much money do I need to buy a ₹50 lakh flat?
About ₹16 lakh of your own for an under-construction flat, before interiors: a ₹10 lakh down payment on an 80% loan, about ₹3–3.5 lakh of stamp duty and registration in most states, ₹2.5 lakh of GST at 5%, and loan fees. A ready flat with a completion certificate carries no GST. Interiors and an emergency fund come on top.
Do most people take a home loan for their first home?
Yes. In Knight Frank's 2024 survey of 1,629 urban homebuyers, 79% preferred to use a home loan, and in ANAROCK's survey of about 8,250 people in the first half of 2025, 87% said they were more likely to take one.
How much EMI can I afford on my salary?
Banks may let all your EMIs together reach about 40–55% of income, and Knight Frank treats more than 50% as unaffordable. For a first home, aim for an EMI of about 30–40% of take-home pay. At 7.75% over 20 years, a ₹30,000 EMI supports a loan of about ₹37 lakh and ₹40,000 about ₹49 lakh.
Who can get the PMAY subsidy on a first home loan?
Under PMAY-U 2.0, families earning up to ₹9 lakh a year who don't own a pucca house anywhere in India can get a 4% interest subsidy on the first ₹8 lakh of a loan up to ₹25 lakh, for a home worth up to ₹35 lakh and up to 120 sq m. The subsidy is at most ₹1.80 lakh, paid in five yearly instalments, on loans sanctioned from 1 September 2024.
Can a couple both claim tax benefits on a joint home loan?
Under the old tax regime, each co-owner who is also a co-borrower can claim up to ₹2 lakh of interest a year on a self-occupied home, and principal within the ₹1.5 lakh limit. The new tax regime gives no interest deduction on a self-occupied home. The Income-tax Act, 2025 applies from 1 April 2026 and renumbers these sections, so check with a CA.
Find the people
Related guides
- Mera pehla ghar: how to plan and buy your first home in India (2026)Why a first home matters so much in India, what Design IRL's survey of 2,230 people found, and the steps from choosing a city and project to checking papers, getting the loan, possession and interiors.
- Home loan EMI and eligibility in India: what you can borrow (2026)How EMI is worked out, how rate and tenure change it, and the income and loan-to-value rules that cap what a bank will lend.
- Stamp duty and registration charges in India, state by state (2026)What eleven states charge to register a home, the lower rates for women, which value the duty is worked on, and how to pay.
- 1, 2 and 3 BHK interiors cost in India (2026)What interiors for a 1, 2 or 3 BHK roughly cost at each finish level, what the price covers, and how the choice of who does it changes the bill.
- Building or renovating a home in Noida: rules and costs (2026)Which authority approves your plot, what the UP Apartment Act and your society allow in a flat, the OC and registry check before interiors, GRAP and hard water, stamp duty, and firms to hire in Noida.
Sources
Most published cost figures come from firms that sell the work. We give ranges and you should get 2–3 quotes.
- Business Today: Knight Frank's Banking on Bricks survey of 1,629 urban homebuyers (November 2024)
- ANAROCK: Homebuyer Sentiment Survey H1 2025
- Housing.com: individual housing loans outstanding, National Housing Bank (September 2024)
- RBI: Housing Finance Companies Directions, 2025 (LTV limits)
- Business Standard: Knight Frank affordability index 2025
- Business Today: SBI raises home loan rates by 25 bps (October 2026)
- Punjab National Bank: Pradhan Mantri Awas Yojana – Urban 2.0
- Busy: GST on under-construction property
- Business Today: what the new Income-tax Act changes from 1 April 2026