Project & Payment
What is a Down Payment Plan?
The biggest discount on the table, in exchange for the one thing you cannot buy back: leverage.
The short answer
A down payment plan means paying 80–95% of the price shortly after booking, in exchange for a discount of 5–10%.
The discount is real. So is what you give up: once they have your money, you have nothing left to withhold. And because your entire loan is disbursed on day one, you pay interest on all of it for every year of construction — which usually costs more than the discount saves.
How it works
You pay the booking amount, then 80–95% of the total price within a short window — typically 30 to 90 days. The remaining sliver is due at possession.
In exchange, the builder gives you a discount, usually 5% to 10% off the base rate. It is the largest discount most projects will ever offer you.
If you're taking a home loan, the bank disburses the full amount at once. Which brings us to the maths.
The maths
Under a down-payment plan, your entire loan is disbursed on day one. You pay interest on 100% of it, for every year of construction.
Under a construction-linked plan, the bank disburses in stages. You pay interest only on what's been disbursed — on average, roughly half.
On a ₹80 lakh loan at 8.5% over three years of construction, that difference is about ₹10 lakh. The discount was ₹4–6.4 lakh.
Down payment vs CLP, honestly
₹80 lakh flat, ₹80 lakh loan at 8.5%, 3 years to possession, 8% down-payment discount.
- DOWN PAYMENT PLAN
- Discount @ 8%
- − ₹6,40,000
- Interest, full loan, 3 years
- + ₹20,40,000
- Net cost of the plan
- ₹14,00,000
- CONSTRUCTION LINKED PLAN
- Discount
- ₹0
- Interest, staged disbursal, 3 years
- + ₹10,20,000
- Net cost of the plan
- ₹10,20,000
The CLP was ₹3.8 lakh cheaper — and it kept your leverage. The discount looked like the better deal and wasn't.
The thing you can't buy back
Set the arithmetic aside for a moment, because this matters more.
A builder who is still waiting for 60% of your money has a reason to keep building. A builder who already has 95% of it does not.
If the project runs late — and projects run late — your only real remedy is to stop paying. Under a down-payment plan, you have nothing left to stop. You have a RERA complaint, a lawyer, and a wait.
They pay a bit more, take the construction-linked plan, and keep the last 5–10% for the possession milestone.
That final slice is what gets the snags fixed. On the day you walk through the flat and find the cracked tiles and the door that won't close, the only question that matters is: do they still need something from me?
When it might actually make sense
To be fair, there are cases:
- You're paying cash, not borrowing. The interest argument disappears entirely, and the discount is straightforwardly yours.
- The property is ready to move or very nearly. There's no construction risk left to hedge against, so there's little leverage to preserve.
- The discount is unusually large — 12–15%, not 5% — and the builder is genuinely blue-chip with a verifiable delivery record.
Outside those, be sceptical. The plan exists because it is good for the builder's cash flow, and it is offered with a discount because it is worth paying for.
Compared to the alternatives
| Construction Linked (CLP) | Down Payment Plan | Subvention Scheme | |
|---|---|---|---|
| How you pay | In instalments, as each construction stage completes | 80–95% upfront, soon after booking | 10–20% upfront. The bank disburses the rest to the builder. |
| Discount | None | 5–10% — the biggest on offer | None, usually |
| Who pays interest before possession | You — but only on what's been disbursed so far | You — on the whole loan, from day one | The builder pays your pre-EMI until possession |
| Your leverage if they're late | Strong. They only get paid when they build. | None. They already have your money. | Weak. The loan is in your name regardless. |
| Risk to you | Lowest | Highest | Hidden — see below |
| Whose credit score is on the line | Yours | Yours | Yours — even though the builder is paying |
There is no free lunch in the subvention row. Read the subvention page before you sign one.
Frequently asked questions
What is a down payment plan in real estate?
You pay 80-95% of the price shortly after booking, typically within 30-90 days, in exchange for a discount of 5-10%. The remainder falls due at possession.
Is a down payment plan worth it?
Usually not, if you're borrowing. Your full loan is disbursed on day one, so you pay interest on all of it for every year of construction — typically around Rs 10 lakh more on an Rs 80 lakh loan over three years than a staged construction-linked disbursal. That usually exceeds the discount. It can make sense if you're paying cash, or if the property is already ready to move.
What's the biggest risk of a down payment plan?
You lose your leverage. A builder still waiting for 60% of your money has a reason to keep building. One who already has 95% of it does not. If the project runs late, your only real remedy is to stop paying — and you have nothing left to stop.
How much discount do builders give on a down payment plan?
Typically 5% to 10% off the base rate. It's usually the largest discount a project will offer — which should tell you how valuable your money upfront is to them.
Should I pay everything before possession?
No. Keep 5-10% payable on possession, whatever plan you choose. That final slice is what gets the snags fixed on the day you inspect the flat. Without it, you're relying on goodwill.