For many aspiring homeowners, the biggest hurdle isn’t the monthly EMI—it’s arranging a hefty down payment. Traditionally, lenders require borrowers to put down 15–25% of the property’s value upfront. But if you don’t have significant savings, does that mean you can’t get a housing loan? Not at all. Today, there are smart ways to secure a property loan even if you can’t make a large down payment.
Here’s how you can own your dream home sooner, without draining your savings.
Opt for a Higher Loan-to-Value Ratio
Loan-to-Value (LTV) ratio is the percentage of the property value that a lender agrees to finance. While many banks cap it at 75–80%, some lenders—especially housing finance companies—offer housing loan products with up to 90% LTV for eligible applicants. This means you only need to arrange 10% of the property’s value, significantly lowering the upfront burden.
Use Government Schemes
Government initiatives like the Pradhan Mantri Awas Yojana (PMAY) offer interest subsidies and reduced down payment requirements for first-time homebuyers. If you meet income and eligibility criteria, you can get a property loan with easier terms and a smaller down payment, especially for affordable housing projects.
Include Co-Applicants to Boost Eligibility
Adding a spouse, parent, or earning family member as a co-applicant can increase your combined income, allowing you to qualify for a higher housing loan amount. This can reduce the gap between the loan and property cost, lowering your required down payment.
Choose Under-Construction Properties with Builder Tie-Ups
Many developers have tie-ups with banks offering special property loan schemes. These may include lower booking amounts, staggered payments during construction, or subvention plans where you pay nothing until possession. These options effectively reduce the immediate down payment needed.
Leverage Existing Assets as Collateral
If you own investments like fixed deposits, gold, or insurance policies, you can pledge them as security to get a higher housing loan amount. Some lenders offer overdraft-linked property loan products that use these assets to compensate for a low down payment.
Negotiate with the Builder
Builders looking to close sales often agree to flexible payment plans. You might negotiate a lower initial payment or split the down payment into smaller installments spread over several months—making it easier to manage finances without compromising on your dream home.
Improve Your Credit Profile
While not directly reducing the down payment, a good credit score (750+) helps you negotiate better terms, including higher LTV ratios. By demonstrating repayment discipline, you build trust with lenders, who may agree to finance a larger portion of your property’s value through a housing loan.
Consider Loans for Down Payment
Though not ideal for everyone, some borrowers opt for personal loans or loans against assets to arrange their down payment. If you choose this route, ensure your combined EMIs for the property loan and the additional loan don’t exceed 40% of your monthly income to avoid financial strain.
Conclusion
A large down payment should not stop you from becoming a homeowner. By exploring high LTV options, government schemes, builder tie-ups, and co-applicant strategies, you can secure a housing loan with a manageable upfront cost. Remember, the right property loan is not just about the lowest EMI—it’s also about aligning the loan terms with your current finances so you can buy your home with confidence and peace of mind.
