Source: Times Property ( )

Planning to buy a home? Here’s how you can start saving efficiently for your down payment

Buying a home is a big financial decision and requires tedious planning, especially to raise the initial down payment. As per the RBI, when buying a home, the homebuyer should be able to pay at least 20 per cent of the property value as the down payment. Thus, making saving for the down payment a goal-based, long-term project. If you are just starting out, here’s how you can save for the down payment.

The very first thing to do is to figure out a realistic budget and timeline. For example, if you are planning to buy a home worth Rs one crore, you would have to give around 20 lakh for the down payment. And assuming the time frame of five years, you would have to save around Rs 33,500/- per month. 

So, unless your monthly salary allows you to save this amount without cutting too many corners, you are on the right track to buying a house. In case, there is amount is not possible, you can consider reducing your budget, or increasing the timeline. 

The next step is to find the right instrument to save money, while the equity market gives good returns and can help you reach your goal faster, do keep in mind that it is also a very volatile market. 

“You can also consider investing in short-term debt funds through SIPs, or high-yield fixed deposits. Short-term debt funds usually generate higher post-tax returns than fixed deposits for those having investment horizons exceeding three years,” informs a financial expert.