How much salary do I need to buy a house in India?

Your home loan EMI should not exceed 40% of your take-home salary. For a 70 lakh home with 14 lakh down payment and 56 lakh loan at 8.5% for 20 years, the EMI is about 48,600. You need a take-home salary of at least 1.22 lakh/month, which translates to roughly 22-25 LPA CTC depending on deductions.

What is the minimum down payment for a home loan in India?

Banks finance up to 80% of the property value (90% for homes under Rs 30 lakh). So the minimum down payment is 20% of the property value. For a 70 lakh home, that is 14 lakh. Banks prefer higher down payments as it reduces their risk and may offer better interest rates.

What are the hidden costs of buying a house in India?

Beyond the property price, budget for: stamp duty (3-8% depending on state), registration charges (1%), GST on under-construction property (5% without ITC), legal fees, brokerage (1-2%), interior/furnishing, maintenance deposit, and home insurance. Total hidden costs can add 10-15% to the property price.

Buying Your First Home in India: A Complete Financial Guide

Financial guide for first-time home buyers in India. Budget calculation (EMI under 40% of income), down payment, home loan comparison, hidden costs, and a real example of buying a 70L flat in Bangalore.

Deepak and Priya, both 31, combined income 28 LPA, have been renting a 2BHK in Whitefield, Bangalore for Rs 25,000/month. They want to buy their first home. Their budget "feels like" 80-90 lakh based on what friends have bought. The actual number, based on their finances, is closer to 65-70 lakh. Here is how they figured it out.

Step 1: What Can You Actually Afford?

Two rules govern home affordability:

The 40% EMI rule: Your total EMIs (home loan + car loan + personal loan + credit card minimum) should not exceed 40% of your combined take-home salary. Banks use FOIR (Fixed Obligation to Income Ratio) of 50-60% for loan approval, but living at 50-60% FOIR leaves zero room for savings or emergencies. Stick to 40% or less for financial comfort.

The 4x salary rule: Total property value should not exceed 4-5x your annual gross income. At 28 LPA combined, that caps the property at 1.12-1.40 crore. More conservative estimates use 3-4x.

Deepak and Priya's take-home: approximately 1,90,000/month combined (after PF, TDS, professional tax). 40% = Rs 76,000 available for EMI. They have no other loans.

At 8.5% interest for 20 years, an EMI of 76,000 supports a loan of approximately 87 lakh. With 20% down payment, that means a property up to 1.09 crore. But wait. This uses the full 40% allocation. A more comfortable 30-35% allocation (57,000-66,500 EMI) supports a loan of 65-76 lakh, meaning a property of 81-95 lakh.

They settle on a target of 70 lakh. Use our home affordability calculator to find your number.

Step 2: The Down Payment

Banks typically finance 75-80% of the property value for homes above 30 lakh. For a 70 lakh property, the bank will lend up to 56 lakh. Deepak and Priya need 14 lakh as down payment.

Where this 14 lakh comes from: savings (FD, MF redemptions), parents (gift, not a loan - this matters for documentation), PPF withdrawal (partial withdrawal allowed after 7 years), or a combination.

One mistake: taking a personal loan for the down payment. Banks check your credit report. A fresh personal loan increases your FOIR and may reduce the home loan amount approved. It also means paying 12-16% interest on the personal loan alongside 8.5% on the home loan. Avoid this if possible.

Step 3: The Home Loan Comparison

Bank	Interest Rate (Apr 2026)	Processing Fee	Prepayment Penalty
SBI	8.50% (EBR + 0.30%)	0.35% (min 2,000, max 10,000)	Nil for floating rate
HDFC Bank	8.70%	0.50% (up to 3,000)	Nil for floating rate
ICICI Bank	8.75%	0.50% (up to 5,000)	Nil for floating rate
Bank of Baroda	8.40%	0.25% - 0.50%	Nil for floating rate
Kotak Mahindra	8.75%	0.50%	Nil for floating rate

At 56 lakh loan: SBI at 8.50% for 20 years = EMI Rs 48,600. Total interest paid: 60.6 lakh. HDFC at 8.70% = EMI Rs 49,700. Total interest: 63.2 lakh. The 0.20% rate difference costs 2.6 lakh over 20 years.

Always negotiate. If you have a CIBIL score above 750, good salary, and stable employment, banks will offer 0.05-0.15% below their published rates. Getting an offer from one bank and showing it to another works surprisingly well.

Calculate your exact EMI with our EMI calculator and see the full amortization schedule with our mortgage amortization calculator.

Step 4: The Hidden Costs Nobody Tells You About

Cost	Amount (for 70L in Karnataka)	Notes
Stamp Duty	3,50,000 (5%)	Varies by state: 3-8%
Registration	70,000 (1%)	Typically 1% across India
GST (under-construction)	3,50,000 (5%)	Not applicable on ready-to-move
Legal/documentation	15,000-30,000	Lawyer fees for title verification
Brokerage	70,000-1,40,000 (1-2%)	If buying through a broker
Interior/furnishing	3,00,000-8,00,000	Semi-furnished: 3-5L, full: 5-8L
Maintenance deposit	1,00,000-2,00,000	Society charges for 1-2 years upfront
Home insurance	3,000-5,000/year	Covers structure and contents
Loan processing fee	10,000-30,000	0.25-0.50% of loan amount

Total hidden costs for a ready-to-move 70L flat in Bangalore: 8-14 lakh (without interior). With basic furnishing: 11-20 lakh. That 70 lakh flat actually costs 78-90 lakh all-in.

Check stamp duty for your state with our stamp duty calculator.

Step 5: Ready-to-Move vs Under-Construction

Under-construction is 10-20% cheaper but comes with risks: delayed possession (very common, 1-3 year delays are normal), 5% GST on the purchase price (not applicable on ready homes), and you pay both EMI and rent simultaneously during the construction period.

Ready-to-move is pricier but you get what you see. No GST. Immediate possession. You can start tax benefits (Section 24 and 80C) immediately.

For first-time buyers, ready-to-move is safer unless you are buying from a tier-1 developer with a strong track record of on-time delivery (Godrej, Prestige, Sobha, Brigade in Bangalore).

The Real Example: Deepak and Priya Buy in Whitefield

They find a 2BHK (1,100 sqft) in a ready-to-move society in Whitefield for 68 lakh.

Their costs:

Down payment: 13.6 lakh (20%). Stamp duty (5%): 3.4 lakh. Registration (1%): 68,000. Legal: 20,000. Brokerage: 1.36 lakh. Loan processing: 15,000. Maintenance deposit: 1.2 lakh. Basic furnishing: 4 lakh.

Total upfront outflow: 24.4 lakh. They had 16 lakh in savings (FD + MF). Priya's parents contributed 8 lakh as a gift. That covers it.

Monthly outflow: Home loan EMI (54.4L at 8.5%, 20 years): Rs 47,200. Society maintenance: Rs 5,500. Property tax: Rs 1,200. Home insurance: Rs 400. Total: Rs 54,300/month.

On combined take-home of 1.9 lakh, that is 28.6% going to housing. Well within the 40% comfort zone. They still have 1.36 lakh for other expenses, SIPs, and lifestyle.

The Rent vs Buy Math

They were paying 25,000/month rent for a similar apartment. Now they pay 54,300. The extra 29,300/month goes toward building equity (principal repayment) and interest.

In year 1: EMI = 47,200. Interest component: ~38,500. Principal: ~8,700. They are "saving" 8,700/month in equity. By year 10, the split reverses: interest ~24,000, principal ~23,200.

The rent vs buy breakeven depends on rental yield (rent/property value ratio). In Bangalore, rental yield is about 3-3.5%. At 3%, a 70L property generates 21,000/month in rent. If your EMI + maintenance is 54,300, you are paying 33,300 more than renting. That premium buys you equity buildup and potential appreciation.

If property appreciates at 5-6% (Bangalore average for good locations), the 70L flat is worth 93L in 5 years or 1.26 crore in 10 years. Subtract the remaining loan balance (46L after 5 years, 33L after 10 years) and your equity is 47L after 5 years or 93L after 10 years. That is significant wealth from forced savings via EMI.

Tax Benefits of Buying a Home

Section 24(b): Interest deduction up to 2 lakh/year (old regime only, self-occupied property). At 30% bracket: saves 62,400/year.

Section 80C: Principal repayment up to 1.5 lakh/year (within the 80C limit that also includes EPF, PPF, ELSS). Stamp duty and registration charges are also deductible under 80C in the year of purchase.

Section 80EEA: Additional 1.5 lakh interest deduction for first-time buyers if property value is under 45 lakh (stamp duty value). This expired in March 2022 and has not been renewed, but check for updates in the current budget.

Common Mistakes

Stretching to the max loan amount: Banks approve 60x your monthly salary. That does not mean you should borrow that much. Leave room for SIPs, emergencies, and lifestyle.

Ignoring resale potential: Buy near IT parks, metro lines, good schools, and hospitals. An apartment 2 km from the metro sells for 20-30% more than one 5 km away. Location drives appreciation.

Not verifying title: Hire an independent lawyer (not the builder's lawyer) to verify the property title, check for encumbrances, and confirm all approvals (RERA, plan approval, completion certificate). This 15,000-20,000 investment prevents lakhs in future legal problems.

Forgetting maintenance costs: A 1,000 sqft apartment in a society with pool, gym, and clubhouse can have 5,000-8,000/month maintenance. Budget for this as a recurring cost.

The Bottom Line

Buying a home is the largest financial decision most Indians make. Do the math before falling in love with a flat. Use our home affordability calculator to find your budget, EMI calculator to check monthly payments, and stamp duty calculator to estimate registration costs. If the numbers work, it is one of the best forced-savings vehicles in India. If they do not, renting and investing the difference is perfectly rational.