Down Payment Planning: A Step-by-Step Guide for Home Buyers

Key Takeaways: 

• Plan for more than just the EMI—your down payment shapes eligibility, costs, and peace of mind.
• Expect to put in at least 10–25% as a minimum down payment with most banks and NBFCs.
• “No down payment” offers usually come with subvention schemes, so the loan still sits in your name.
• A bigger down payment lowers your EMI but also ties up your savings—balance is key.
• Always read the fine print on flexible plans; builder credibility, hidden charges, and lock-in clauses matter more than the headline offer.
• Doing your homework at the start can save you years of stress later.

An Overview: Why Down Payment Planning Deserves More Attention

When it comes to buying a home, most buyers focus on the location, builder reputation, or property size. But your down payment—how much you pay upfront and how you manage it—plays a key role in shaping your overall financial commitment.

A well-planned down payment can reduce loan burden, improve eligibility, and even open up better financing options. In this blog, we’ll walk through practical ways to approach down payment planning, what options exist in the market today, and how to make informed choices that align with your budget and goals.

In this blog, we break down how to approach your down payment the right way. From understanding how much is mandatory to exploring smarter saving strategies, we’ll help you make decisions that are practical today and sustainable tomorrow.

Understanding Down Payment Plans: With Loan vs. Without Loan

Down payment plans today come in two broad categories, with loan and without a loan. Understanding this basic split is the first step to making a smarter decision.

1. Without Loan

These are straightforward. You pay a fixed upfront amount—say 10% or 20%—and the rest either on possession or by a pre-agreed date. No bank involvement, no interest, just scheduled payments between you and the builder.

Example:

A 10:90 plan without a loan means you pay 10% now, and 90% when you take possession. No bank loan is processed during this period.

This works well if you have available funds and want to avoid EMIs or loan paperwork altogether.

2. With Loan (Subvention Schemes)

This is where things get a bit layered. Under subvention or deferred payment schemes, a home loan is sanctioned in your name, but the builder takes on the EMI responsibility for a certain period.

Common terms you may hear:

• EMI Holiday
• Pay Nothing Till Possession
• Free Pre-EMI
• Subvention Scheme
• 10:90 Plan (With Loan)

Here, the bank disburses the loan, and the builder pays the EMI on your behalf for a defined duration. It's critical to understand who is paying whom, how long the subvention lasts, and what liabilities exist if things get delayed. 

How Subvention Schemes Actually Work

On the surface, subvention plans look simple; you pay a small booking amount upfront and nothing else till a pre-agreed date. But the actual structure involves three parties and specific timelines, which makes it important to know exactly how they function.

Here’s a quick breakdown using a 10:90 plan as an example:

1. You pay 10% upfront as a booking amount to the builder.
2. A loan is sanctioned in your name for the remaining 90% amount.
3. The bank disburses the amount to the builder as per construction milestones.
4. Builder pays the EMIs on your behalf until a specific date or possession.
5. After that date, the EMI responsibility shifts to you.

This essentially gives you 10X leverage on your initial capital, making it a lucrative option for both investors and buyers waiting for income stability or project readiness. But leverage only works in your favour when you know what you’re signing up for, and when.

6 Things You Must Check Before Saying Yes to a Subvention Plan

Subvention schemes like 10:90, Pay Nothing Till Possession, or Free Pre-EMI offers sound like a dream for homebuyers and investors. You pay a small booking amount, get instant leverage, and avoid EMIs for a while. 

But underneath the surface, these plans are often more complex than they seem.

Here are six non-negotiable checks before you sign up for one:

1. Is the Property Price Inflated?

Builders offering subvention plans usually load an additional premium into the base price to cover the cost of EMIs they will be paying on your behalf. This means the same apartment could be cheaper if bought via a standard construction-linked plan. Always compare prices across plans and try negotiating down the subvention premium.

2. What Is the Duration of the Subvention?

You get massive leverage by paying just 10 to 20 percent upfront. But for how long is the builder covering EMIs? A longer subvention window, like 24 to 36 months, gives you more breathing room and higher return potential, especially if the market appreciates. A shorter window, like 6 to 12 months, might not justify the added cost.

3. Is There a Lock-In Period?

If you plan to sell the apartment once the price appreciates, check whether there is a lock-in clause. Some builders restrict resale for a fixed time, usually until possession or registration. If your capital is locked longer than expected, it may impact your liquidity and exit strategy.

4. What Is the Transfer Fee?

Let us say you find a buyer before registration. Are you allowed to transfer the property? Most builders charge a transfer fee, which could be

• A flat amountA per-square-foot rate
• A percentage of the resale value

This cost can eat into your margins. Clarify it upfront and, if possible, negotiate it while booking.

5. How Credible Is the Builder?

A flashy scheme does not compensate for poor execution. Check

• Past delivery timelines
• Build quality in previous projects
• Consumer complaints
• Financial track record

You can also refer to third-party audits like the Brickfi360 Report to verify if the promises made match historical delivery.

6. What Is the Loan Structure?

If a loan is involved, understand the exact EMI arrangement

• Is there a tripartite agreement between you, the builder, and the bank? (This is ideal)Or does the builder expect you to pay first and then reimburse you?

The second setup can expose you to repayment risk and defeat the purpose of an EMI holiday. Clarity here is critical.

Final Thoughts: The Plan May Be Lucrative, But Clarity Is Priceless

Subvention schemes and flexible payment plans can sound incredibly attractive, and in many cases, they genuinely are. But as with anything in real estate, the real value lies in the details.

Understanding what you're signing up for,  the lock-ins, the fine print, and the builder’s history can make all the difference between a smart investment and an unexpected burden.

At Brickfi, we don’t just track listings,  we help you decode them. From builder verification to plan comparisons, we ensure that you know exactly what you’re saying yes to.

If you're considering a project under a subvention plan or any flexible payment scheme, we’re happy to take a look and walk you through it — no jargon, no pressure. 

FAQs: Home loan down payment

1. What is the minimum down payment I need for a home loan in India?

Most banks and NBFCs expect buyers to contribute at least 10–25% of the property’s value as a down payment. The exact percentage depends on your loan eligibility, lender policy, and the property type.

2. Are there really home loans with no down payment?

In India, “no down payment” home loans are not common. Some schemes or builder offers may reduce upfront payments, but a basic margin contribution from the buyer is almost always required.

3. Do subvention or “Pay Nothing Till Possession” schemes mean I don’t pay anything at all?

These schemes usually shift the EMI responsibility to the builder for a fixed period, but the loan is still in your name. Once the subvention period ends, repayment is fully your responsibility.

4. Is it better to make a bigger down payment to reduce EMI?

A higher down payment reduces the loan amount and can lower EMIs, but it also ties up more of your savings. The balance between affordability and liquidity is different for every buyer.

5. What risks should I be aware of with flexible down payment plans?

Some common risks include inflated property pricing, shorter subvention windows, lock-in clauses, or unclear EMI arrangements. These are not deal-breakers in every case, but they’re worth checking closely before committing.