Plan your monthly SIP to save the 20% down payment for your home purchase.
Monthly SIP needed
₹26,416
per month for 5 years at 9% p.a.
Projections assume a constant return of 9% p.a. Mutual fund returns vary and are not guaranteed.
Buying a home in India typically requires a down payment of 20% of the property value (banks generally lend only 80%). For a ₹75 lakh flat, that means saving ₹15 lakh before you can even approach the bank. Add stamp duty (5-7%) and registration, and the actual upfront cash requirement can be ₹18-20 lakh. Starting a dedicated SIP for the down payment is the most disciplined way to build this corpus - and it keeps you from raiding your emergency fund or retirement savings when the time comes.
For a 5-year home goal, a balanced approach works best - some equity for growth, some debt for stability:
Target = Down Payment + Stamp Duty + Registration + Buffer
We default to 9% expected return - achievable with a balanced hybrid fund or a 60/40 equity-debt combination over 5 years. Property prices typically rise at 6% p.a. in metro areas, so inflation adjustment is on by default.
Banks/HFCs lend 75-80% of the property value (LTV). So for a ₹75L property, you need ₹15-18.75L as down payment. Add stamp duty (4-7% of property value depending on state) and registration (1-2%), and total upfront cash is typically 25-30% of the property cost.
If you can afford it, a higher down payment reduces your home loan EMI burden significantly. But don't deplete your emergency fund or retirement savings to do so. A good rule: down payment from dedicated savings only; never touch your 6-month emergency fund.
Balanced hybrid funds (targeting ~9-10% returns) or a combination of equity funds (60%) and short-term debt funds (40%). Pure equity is risky for a 5-year goal - a bear market in year 4 could delay your purchase. Consider switching to pure debt 1-1.5 years before you plan to buy.
If you are a first-time home buyer with income under ₹18L (PMAY-CLSS), you can get an interest subsidy of up to ₹2.67 lakh on your home loan. Check PMAY eligibility - it doesn't change your down payment requirement but reduces total interest cost significantly.
Yes - EPFO allows withdrawal of up to 90% of your EPF balance after 5 years of membership for purchase or construction of a house. However, EPF withdrawal reduces your retirement corpus. Use it only as a top-up, not as the primary source of your down payment.
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