The all-in cost of buying a home
The 20% down payment is the visible cost. Add: stamp duty (5-7% in most states), registration (1%), broker fees (1-2% if applicable), home loan processing fees (~0.5%), interior fitting and basic furniture (5-10% of property value for a ready-to-move flat), and a 12-month EMI buffer for income disruption.
Total cash needed before move-in is typically 30-40% of the property value, not 20%. Plan the SIP for the higher number — under-saving here means scrambling for unsecured loans at exactly the wrong moment.
Allocation for a 5-8 year house goal
Pure equity is too volatile for this horizon. A 60/40 equity-debt mix (or an aggressive hybrid fund category) plans at 10% CAGR with materially lower drawdown. For a goal with a calendar deadline, drawdown risk matters more than the last 2% of return.
In the final 18 months before purchase, glide path to 20% equity / 80% short-debt. Lock in gains progressively; don't try to time the final 12 months.
EMI affordability is the parallel calculation
Down payment is one calculation; the EMI you can sustain is another. Banks lend up to 50-60% of post-tax income as EMI, but a more comfortable rule is to cap EMI at 35-40% of post-tax income. Anything more crowds out other goals (retirement, child education).
Request a callback for a combined house-fund + affordability plan with a local advisor.