How does a down payment affect the home affordability calculation?

The size of your down payment significantly impacts your home loan affordability. A larger down payment greatly improves home affordability. This is because a bigger down payment reduces the amount you need to borrow through your home loan.

For example, if a home costs ₹1 crore, a 20% down payment of ₹20 lakh decreases the loan amount to ₹80 lakh. A 10% down payment of ₹10 lakh results in a higher ₹90 lakh loan amount. The lower principal with a bigger down payment translates into lower EMIs.

When using a home loan affordability calculator, pay close attention to how different down payment amounts affect the loan terms and monthly payments.

Generally, the more you can pay as a down payment, the lower your resulting home loan amount and EMIs become. This increased affordability could allow you to qualify for a more expensive property while keeping payments comfortable. Use a home loan affordability calculator to know how much down payment you would need to make and how much loan can you easily afford.