Real estate calculators

The down payment is never just the down payment

Lenders fund a percentage of the property value, not the total cost of acquiring it. Under Reserve Bank of India norms the loan-to-value ratio is capped at 90 per cent for loans up to ₹30 lakh, 80 per cent between ₹30 and ₹75 lakh, and 75 per cent above ₹75 lakh. The remainder is your contribution.

Crucially, stamp duty and registration sit outside the valuation the bank lends against. On an ₹80 lakh property you are looking at ₹16 lakh of down payment plus roughly ₹5.1 lakh of duty and registration in a state charging 6 per cent — over ₹21 lakh of cash before you account for brokerage, legal fees, or any furnishing. Buyers who budget only for the down payment are routinely caught short at registration.

Renting is not throwing money away

The popular argument that rent is wasted while EMI builds an asset ignores that a large share of early EMIs is interest, which is just as unrecoverable as rent. In the first year of a twenty-year loan at 8.5 per cent, roughly 81 per cent of what you pay is interest.

An honest comparison sets rent against the genuinely non-recoverable costs of owning: interest, property tax, maintenance and society charges, insurance, and the opportunity cost of the capital locked in the down payment. The rent versus buy calculator makes this comparison explicit, including what the down payment might have earned if invested instead.

Buying tends to win when you will stay long enough to amortise the transaction costs — usually at least five to seven years — and when rental yields in your city are high relative to loan rates. In cities where yields sit near 2 to 3 per cent while home loans cost 8.5 per cent, the arithmetic favours renting for longer than most buyers expect.

What you can afford versus what you are offered

Lenders size loans using FOIR, allowing total EMI obligations of roughly 40 to 55 per cent of net income. That is an upper bound derived from their risk appetite, not a recommendation. A household at the top of that range has very little room for a job change, a medical event, or a rate reset.

A more durable rule is to keep housing EMI near 30 to 35 per cent of take-home pay, and to hold six months of expenses in reserve even after the down payment has been made. The affordability calculator works from what you can sustain rather than what a lender will approve.

Appreciation assumptions deserve scepticism

Property appreciation in India has been highly uneven. Some micro-markets have done very well over the last decade while others have been flat in nominal terms, which means they have lost ground against inflation. National or city averages are close to meaningless for an individual property, because location, builder quality, legal title, and infrastructure timing dominate.

When the appreciation calculator asks for a growth rate, treat it as a scenario to test rather than a forecast to trust. Running it at 4 per cent and at 8 per cent will show you how much of your expected outcome depends on an assumption nobody can verify in advance.

Tax benefits and resale costs

Under the old tax regime, home loan interest on a self-occupied property is deductible up to ₹2 lakh a year under Section 24(b), and principal repayment counts within the ₹1.5 lakh Section 80C limit. The new regime removes both for self-occupied property, which materially changes the after-tax cost of owning and should be factored into any rent versus buy comparison.

On exit, gains are taxed as capital gains, with reliefs available when proceeds are reinvested in residential property or specified bonds within prescribed timelines. Brokerage on the sale and any pending society dues also reduce what you actually realise.