How To Save Money For Downpayment For A Home?

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Owning a home is a dream for many individuals. However, the difficulty arises when it comes to downpayment as you need to pay at least 15-20 per cent of the loan amount.

Due to this many individual keep postponing their decision to buy a home. It is never late to start disciplined investment if you haven't started yet.

How To Save Money For Downpayment For A Home?

Saving regularly with different investment options will help you generate sufficient amounts.

Here are 5 ways through which you can save amount for downpayment:

1) Investment through SIP

Systematic Investment Plans (SIP) is a method of investing a fixed sum on a regular pre-specified basis, in a mutual fund scheme.

Individuals have the option to choose between quantity-based and amount based SIPs from Stocks, Mutual Funds, ETFs and Gold. Investing in equity for the medium term can fetch you better returns and help you with the downpayment.

2) Track monthly expenses

Only when you make a list and spend, you will have a fair idea of where your money has been spent during the course of the month.

Cut shot on unnecessary expenses and shopping habits.

3) Budgeting

Set aside a budget for each expense and try to spend accordingly. This will help to a great extent as you can save the extra amount.

4) Recurring deposit

If you are finding it difficult to save go for recurring deposit, as the amount will be debited from you account on monthly basis.

5) Small and Mid Cap

Some of the best small cap funds in India have beaten returns of the Sensex and the Nifty in the last three years. However, it depends on the market volatility.

Other things to consider

  • Make use of bonus amount or hike in your salary instead of spending it vaguely. Do not increase your financial commitments till you accumulate your downpayment amount. 
  • Look for an affordable flat or home. Saving for high-cost housing should not ruin your present lifestyle and affect your family. 
  • Sell your excess things, such as if you own two cars and hardly making use of one. Getting rid of such things will help you earn along with savings.


If you have nil savings, then it will take time to generate income for the downpayment. By following above-mentioned suggestions and not getting into unnecessary debt will help you save some amount which can be used for the downpayment of home.

Read more about: home loan, emi
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