Buying a house lowers your net worth on the day you buy, by at least the stamp duty, registration and any brokerage you pay: the down payment simply becomes part of the flat, and the loan adds the same amount to what you own and what you owe. Your investable net worth, the money that can pay for goals and an early retirement, falls by far more: the whole down payment plus those costs.
Why does net worth fall the day you buy a house?
Net worth sets assets and liabilities against each other, what you own minus what you owe (the net worth guide lists what counts and at what value).
The down payment changes form, from funds to flat, so nothing is lost. The loan adds the rest of the price to your assets and the same sum to your liabilities, which nets to zero. Stamp duty, registration, brokerage and interiors buy nothing you could sell for what they cost, so net worth falls by them.
The gap can widen. A home is counted at what a similar flat nearby would fetch, not at what you paid, and a resale buyer pays stamp duty again, so a new flat may resell below its price (buy vs rent a house tests when buying still wins). And selling mutual funds to pay turns the capital gains tax hidden in their value into tax paid.
Investable net worth leaves out two things: the emergency fund, and the home you live in, which pays no bills.
Chetan's ₹1.2 crore flat: net worth the day before and after
Chetan earns a ₹40 lakh CTC, about ₹2,29,100 a month in hand (CTC vs in hand salary). He holds ₹35,00,000 in equity mutual funds, ₹9,00,000 in EPF and an ₹8,50,000 emergency fund in a bank deposit, and he is buying a ready flat for ₹1.2 crore, paid for after its completion certificate, so no GST applies (an under-construction flat would add 5%).
For a loan above ₹75 lakh, RBI lets a lender fund at most 75% of the price (80% for a loan above ₹30 lakh up to ₹75 lakh, 90% up to ₹30 lakh), not counting stamp duty and registration. So Chetan's ₹90,00,000 loan is at the 75% cap and ₹30,00,000 must come from him. At an assumed 8.5% over 20 years, the EMI is ₹78,104, about 34% of his take-home. Lenders charged about 7.25% to 10% or more in 2026, depending on the lender and your credit score.
His stamp duty and registration come to an assumed ₹7,68,000, about 6.4% of the price (the rate depends on the state, and some states charge women buyers less). With no brokerage on a builder sale, he needs ₹37,68,000.
Under the EPF Scheme, 2026, in force since 29 June 2026, a member with 12 months of membership can take up to 75% of the balance towards buying a home, so he withdraws ₹6,75,000. He has nine years of continuous service, so it is tax-free; under five years it would usually be taxed. He sells ₹31,58,000 of fund units held over a year, carrying ₹6,25,000 of gains. With no other equity gains this year, the first ₹1,25,000 is exempt, and tax at 12.5% plus 4% cess (FY 2026-27) on the other ₹5,00,000 is ₹65,000, which leaves ₹30,93,000.
His emergency fund stays put. His wife also earns and his pay is fixed, so six months of essentials with the EMI, about ₹8,40,600, is enough; the only earner in a household with dependants, or someone whose pay is largely variable, needs nine to twelve months (emergency fund guide).
| Line | Day before | Day after, at cost | Day after, at resale value |
|---|---|---|---|
| Flat | none | ₹1,20,00,000 | ₹1,14,00,000 |
| Home loan owed | none | ₹90,00,000 | ₹90,00,000 |
| Mutual funds | ₹35,00,000 | ₹3,42,000 | ₹3,42,000 |
| EPF | ₹9,00,000 | ₹2,25,000 | ₹2,25,000 |
| Emergency fund | ₹8,50,000 | ₹8,50,000 | ₹8,50,000 |
| Net worth | ₹52,50,000 | ₹44,17,000 | ₹38,17,000 |
| Investable net worth | ₹44,00,000 | ₹5,67,000 | ₹5,67,000 |
At cost, his net worth falls ₹8,33,000: ₹7,68,000 of stamp duty and registration plus ₹65,000 of tax. If similar flats in his building resell at an assumed ₹1,14,00,000, 5% below his price, it falls ₹14,33,000. Investable net worth falls ₹38,33,000.
What does day one cost at ₹80 lakh, ₹1 crore and ₹1.2 crore?
Same assumptions, before tax on funds sold.
| Flat price (CTC) | Down payment (loan cap) | Net worth falls (stamp duty and registration) | Investable net worth falls | EMI, share of take-home |
|---|---|---|---|---|
| ₹80 lakh (₹25 lakh) | ₹16,00,000 (loan 80%) | ₹5,12,000 | ₹21,12,000 | ₹55,541, 35% |
| ₹1 crore (₹30 lakh) | ₹25,00,000 (loan 75%) | ₹6,40,000 | ₹31,40,000 | ₹65,087, 36% |
| ₹1.2 crore (₹40 lakh) | ₹30,00,000 (loan 75%) | ₹7,68,000 | ₹37,68,000 | ₹78,104, 34% |
Your FI year runs off investable net worth, not net worth (when can I retire early works it by hand). In the FI calculator, which shows the year your investments could pay for your spending, Chetan's "Current Investments & Savings" is ₹5,67,000 after the purchase (the slider's nearest step is ₹5,00,000), not ₹44,17,000.
How does net worth recover after buying a house?
At cost, net worth wins back the ₹7,68,000 only as the loan's principal is repaid. Of Chetan's first 12 EMIs, ₹1,79,121 repays principal and ₹7,58,128 is interest, which is spending. Principal repaid passes ₹7,68,000 only at the 46th EMI.
RBI's all-India house price index rose 3.6% in the year to Q1 2026-27 (released August 2026); the same rise on ₹1,14,00,000 would add ₹4,10,400, though cities differ.
Neither puts money back into investable net worth. Only new investing does, and the EMI now competes with it each month; prepay home loan or invest tests where a spare ₹5 lakh does more.
Dhi looks at your net worth beside your cash flow, protection and goals, and answers questions such as what a flat purchase would change, from your own numbers. Dhi maps your investments to your goals and takes no commissions.
Frequently asked questions
This is general information for salaried individuals in India, not personalised financial advice.
