Can You Afford a House Down Payment of ₹14-30 Lakh in 5 Years with SIP?

Owning a home can be a dream for many, but arranging the down payment, usually 10-20% of the property cost, can feel overwhelming. A Systematic Investment Plan (SIP) in mutual funds can help you achieve this goal over 5 years by combining discipline, compounding, and market growth. Let’s break it down with a few real-world scenarios.

Scenario 1: Buying a ₹70 Lakh Home

For a property priced at ₹70 lakh, a 20% down payment is ₹14 lakh. Here, investing ₹18,000 per month at the same 10% expected return can grow to around ₹14,05,483 in 5 years. In this case, the invested amount will be ₹10,80,000 and the estimated returns will be ₹3,25,483.

Eventually, you can increase the SIP amount to ₹20,000 per month or adding a 10% annual top-up, you can reach the goal while accounting for market fluctuations.

Scenario 2: Buying a ₹1 Crore Home

If you’re targeting a ₹1 crore house, the down payment could be ₹20 lakh. A SIP of ₹28,000 per month at 10% annual returns could generate approximately ₹21.8 lakh in 5 years, covering your target with some buffer for registration costs or furniture.

In this case, the invested amount will be ₹16,80,000 and the estimated returns will be ₹5,06,307.

Scenario 3: Buying a ₹1.5 Crore Home

For a home worth ₹1.5 crore, the 20% down payment would be ₹30 lakh. To accumulate this amount in 5 years, you’d need to invest ₹42,000 per month through a SIP with an assumed average return of 10% annually. Over 5 years, this would grow to approximately ₹32.7 lakh, giving you a cushion for registration fees or furnishing costs.

In this scenario, the invested amount will be ₹25,20,000 and the estimated returns will be ₹7,59,460.

Plan Your Own Goal with a SIP Calculator

While these scenarios give you an idea of how much to invest for different home budgets, your target amount, timeline, and expected returns can vary. Using a SIP calculator allows you to customise these factors and instantly see how much you need to invest each month to reach your down payment goal. Whether your dream home costs ₹70 lakh or ₹2 crore, a SIP calculator helps you plan systematically and stay on track.

Also Read: Can SIPs Help You Save ₹25 Lakh in 10 Yrs for Your Child’s Education?

Conclusion

By starting early and tailoring your SIP amount based on your dream home’s cost, you can accumulate your down payment in 5 years. With a disciplined approach and a balanced fund mix, owning your home can move from dream to reality, without financial stress.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.