As a golden rule, your home loan EMI should not exceed 40% of your take-home salary — on an ₹80,000 monthly income, that's a maximum EMI of ₹32,000, supporting a loan of roughly ₹38 lakh at 8.75% over 20 years. Banks typically lend 75–90% of the property value, and costs beyond the base price add up to roughly 7% stamp duty, 2–4% registration, and 5% GST on under-construction property in Tamil Nadu.
Quick answer: First-time buyers should work backward from the 40%-of-take-home EMI rule to fix their budget, then add a 10–20% down payment before shopping — for example, a ₹55 lakh flat needs roughly ₹11 lakh down plus a ₹44 lakh loan. Always verify TNRERA registration before visiting any project or paying a booking amount, since it confirms the builder has submitted approved plans, land title documents, and financial disclosures. Factor stamp duty (7%), registration (2–4%), GST on under-construction units (5%), and a maintenance deposit into your total cost, not just the quoted property price. First-time buyers can additionally claim up to ₹1.5 lakh under Section 80C, ₹2 lakh under Section 24(b), and a further ₹1.5 lakh under Section 80EEA if the property is valued at ₹45 lakh or below.
Step 1: Fix Your Budget Before You Start Looking
The golden rule: your home loan EMI should not exceed 40% of your take-home salary. If you earn ₹80,000/month, your max comfortable EMI is ₹32,000 — which at 8.75% p.a. over 20 years supports a loan of approximately ₹38L. Add your down payment (typically 10–20% of property value) to arrive at your total budget. For a ₹55L flat, you'd need ₹11L down payment + loan of ₹44L.
Step 2: Check Your Home Loan Eligibility
Banks typically lend 75–90% of property value for salaried employees. Key factors affecting eligibility:
- CIBIL score: 750+ for best interest rates (below 650 may get rejected)
- Employment stability: 2+ years at current employer preferred
- Existing EMIs: All existing loan EMIs reduce your eligible loan amount
- Co-applicant: Adding spouse/parent as co-applicant increases eligibility significantly
Step 3: Shortlist Properties — Always RERA First
Before visiting any property, check the TNRERA registration (tnrera.in for Tamil Nadu). A RERA registration number means the builder has submitted approved plans, land title documents, and financial disclosures. Never pay a booking amount to an unregistered project — you have no legal recourse if it delays or fails.
Step 4: Understand the Total Cost
| Cost Component | Typical Amount |
|---|---|
| Property price (base) | 100% |
| Stamp duty (TN) | 7% of market value |
| Registration fee | 2–4% of market value |
| GST (under-construction) | 5% of base price |
| Maintenance deposit | ₹50,000–₹2,00,000 |
| Home loan processing fee | 0.5–1% of loan amount |
Step 5: Negotiate and Finalize
For under-construction projects, negotiate on floor-rise charges, car parking, and payment plan flexibility. Builders in slower-moving markets often offer 2–5% discounts for full upfront payment or early bookings. Always get all verbal commitments — possession date, amenities, specifications — in writing in the sale agreement.
Step 6: Registration
Property registration must happen at the local Sub-Registrar Office (SRO). Bring original documents (sale deed, identity proof, PAN card), pay stamp duty and registration fee, and get the registered sale deed back. In Tamil Nadu, you can book a registration appointment online at tnreginet.gov.in.
Tax Benefits for First-Time Buyers
- Section 80C: Principal repayment up to ₹1.5L/year deductible
- Section 24(b): Interest paid up to ₹2L/year deductible (self-occupied)
- Section 80EEA: Additional ₹1.5L deduction if property value ≤ ₹45L (first-time buyer)
