Atul Monga, CEO and Co-founder of BASIC Home Loan 

Diwali is when buying a home can start feeling less like a distant plan and more like something you could actually do. You find a property you like, calculate the down payment and check whether the EMI fits your monthly budget. If the numbers work, it is tempting to believe you’re ready to take the next step.

But the EMI is only one part of the calculation. Buying a home comes with several expenses that don’t always feature in the first round of budgeting. Stamp duty, registration, loan fees and even the cost of getting the house ready to live in can add lakhs to what you need upfront.

And when festive offers create a sense of urgency, it’s easy to focus on the property you want rather than the full cost of owning it. Here are five expenses worth accounting for before you make that commitment.

1. Emergency Fund 

Let’s say you’ve found an ₹80 lakh home. You pay ₹16 lakh upfront and take a home loan for the remaining ₹64 lakh, if approved by the lender. So your EMI would be around ₹55,500 per month at 8.5% interest for 20 years.

That is a significant monthly commitment. But there is another question worth asking: how much money will you have left once you’ve made the down payment? Using up all your savings to get the keys can leave you vulnerable to an unexpected expense or a break in income. Ideally, you should have an emergency fund of 3 to 6 months’ necessary expenses, separate from the money you’re setting aside for the purchase.

2. Registration and Stamp Duty

The price you agree with the seller is not the final price you pay. Besides this, stamp duty and registration charges are applicable, with rates varying from state to state, buyer category and applicable rules.

If these charges amount to 5–8% of an ₹80 lakh property, you would need another ₹4–6.4 lakh.  The exact amount will depend on the location of the property and the rates in place at the time of purchase.

These payments are generally made separately and may not be covered by the home loan. Factoring them in early can prevent an uncomfortable situation in which you’ve arranged the down payment but are still short of the money needed to complete the purchase.

3. HomeLoan Processing and Other Fees

The interest rate is often the first thing buyers compare when choosing a lender. It shouldn’t be the only one.

Depending on the lender, you may also have to pay processing fees, legal verification charges and property valuation fees. For instance, a processing fee of 0.5% on a ₹64 lakh loan works out to ₹32,000, excluding applicable taxes and other charges.

The fee varies by lender and discounts or waivers may be available. Get a full breakdown before deciding on a loan. A lower interest rate may seem attractive, but understanding the other charges helps you understand the total cost of borrowing.

4. Insurance and Protection Costs

Insurance is another cost to be factored in before taking possession. Property insurance covers some risks to your home. Life or loan protection insurance may cover your outstanding home loan in certain circumstances. Both serve different purposes.

Premiums vary by policy, coverage and insurer. Find out which cover, if any, the lender requires and which products are optional. Read the exclusions and payment terms, too. It is easier to make an informed decision before signing up than to discover later that a policy doesn’t cover what you expected.

5. Interiors, Moving and Maintena

Getting the keys is one milestone. Making the house feel like home is another, and it comes with its own bill. Painting, furniture, appliances, electrical fittings, moving expenses and minor repairs can add ₹3–8 lakh or more, depending on the property’s condition and what you need to do. For an ₹80 lakh property, that is another 4–10% of its price.

Then there are society maintenance charges, deposits and other applicable possession-related payments. These may be small expenses individually, but together they can put a lot of strain on your budget. Planning for them upfront is better than relying on credit cards or personal loans just after taking on a home loan.

Look at the full cost, not just the EMI

All of the above costs brings the initial outlay to approximately ₹23.3–30.7 lakh, excluding insurance, other loan charges and additional applicable expenses. The EMI of around ₹55,500 a month would still need to be paid.

This is where the distinction between loan eligibility and affordability becomes important. You may qualify for the loan and be comfortable with the EMI, but that doesn’t automatically mean you have enough money to manage everything that comes with the purchase.

Before committing, work out the full upfront amount and what you’ll need after possession.