Comparison
A structural comparison of two ways to pay, with no rate printed anywhere on it — and no view on which one you should choose, because that is a question about your finances that a web page has no business answering.
What this page is
This page compares two routes to the same purchase on the things that can be stated as fact: what each one commits you to, who scrutinises the property, where the documents sit, how the money reaches the seller, and what each route makes harder later.
It prints no interest rate, no loan-to-value ratio, no processing fee, no tax deduction limit and no tax rate. Not because those figures are unknowable, but because every one of them is set by a lender's policy, an RBI direction or the Finance Act as it stands this year, and any figure published on a page like this is wrong the moment it moves. Each row names the body that publishes the current position instead.
It also offers no advice. Whether borrowing suits you depends on your income, your other obligations, your tax position, what else you would do with the money and how you feel about debt — none of which we can see, and on none of which we are qualified to advise. What follows is the structure of the two routes. The judgement is yours, ideally with a professional who can see your actual numbers.
Facts on this page last reviewed on . Registrations, statutes and administrative practice all change; check the source as well as this page.
Side by side
Each row states the position on both sides, and names the document, register or statute that settles it for a specific project. Where a row touches a figure that moves by notification, it names the body that publishes the figure instead of printing one.
Settled by The loan agreement itself. Ask for the full document, including the schedule of charges, before you sign anything.
Settled by The lender's legal and technical reports, if it will share them, and in either case your own advocate's title opinion.
Settled by The mortgage or deposit-of-title-deeds record, the lender's no-dues and release letter on closure, and a fresh encumbrance certificate showing the charge discharged.
Where the current figure is published Karnataka Department of Stamps and Registration — the stamp duty and registration fee applicable in Karnataka, and the guideline values used to assess them. We print no rate.
Settled by The payment schedule in the agreement for sale, and for a loan, the disbursement clauses of the loan agreement.
Where the current figure is published Karnataka Real Estate Regulatory Authority (K-RERA) — the register of real estate projects and agents in Karnataka, with each project's registration, promoter and filings. We print no rate.
Settled by The lender's schedule of charges, and for stamp and registration, the registration department of the state the property is in.
Where the current figure is published Karnataka Department of Stamps and Registration — the stamp duty and registration fee applicable in Karnataka, and the guideline values used to assess them. We print no rate.
Settled by The loan agreement's interest clause and the lender's key facts statement. The framework governing resets is published by the Reserve Bank of India.
Where the current figure is published Reserve Bank of India — the prudential directions lenders work within, including loan-to-value norms and the rules on how floating rates are reset. We print no rate.
Settled by The Income Tax Department for deductions and the CBIC for GST, read for the year you are actually transacting in — and a chartered accountant for your own position.
Where the current figure is published Income Tax Department — the deductions available on a housing loan and the conditions attached to each of them. We print no rate.
Settled by The prepayment and foreclosure clauses of the loan agreement, read against the RBI's applicable directions.
Where the current figure is published Reserve Bank of India — the prudential directions lenders work within, including loan-to-value norms and the rules on how floating rates are reset. We print no rate.
Settled by Nothing documentary. This row is a description of exposure, not a prediction — and it is the row on which you should take advice rather than read a website.
Settled by The agreement for sale's conditions and payment schedule, whichever route you take.
| Dimension | With a home loan | Outright |
|---|---|---|
| What you are committing to | A long-term contractual obligation to a lender, secured on the property, with instalments payable irrespective of what happens to your income. The loan agreement — not the sanction letter — sets the terms. | No ongoing obligation to anyone. The money is spent and the exposure is over. |
Settled by The loan agreement itself. Ask for the full document, including the schedule of charges, before you sign anything. | ||
| Who else looks at the property | The lender's legal and technical teams examine the title and value the property, because they are taking security over it. That scrutiny is genuinely useful to you — but it is done for the lender's protection, on the lender's criteria, and a sanction is not a certificate of good title. | Nobody but you. Whatever diligence gets done is diligence you commission — which means engaging your own advocate to investigate title, and reading the encumbrance certificate yourself. |
Settled by The lender's legal and technical reports, if it will share them, and in either case your own advocate's title opinion. | ||
| Where the title documents sit | With the lender, for the life of the loan, under a mortgage. On repayment you must obtain the release and ensure the charge is removed from the record — a step people forget, and one that surfaces years later at the worst moment. | With you, from registration onwards. |
Settled by The mortgage or deposit-of-title-deeds record, the lender's no-dues and release letter on closure, and a fresh encumbrance certificate showing the charge discharged. Where the current figure is published Karnataka Department of Stamps and Registration — the stamp duty and registration fee applicable in Karnataka, and the guideline values used to assess them. We print no rate. | ||
| How the money reaches the seller | In stages, against construction milestones, on the lender's own verification. The staging is the lender's protection, not yours, but it does mean money is not paid for work not certified as done. | On the schedule the agreement for sale sets, which is bounded by what the Real Estate (Regulation and Development) Act, 2016 and the rules under it permit a promoter to demand and when. Read that schedule before you pay against it. |
Settled by The payment schedule in the agreement for sale, and for a loan, the disbursement clauses of the loan agreement. Where the current figure is published Karnataka Real Estate Regulatory Authority (K-RERA) — the register of real estate projects and agents in Karnataka, with each project's registration, promoter and filings. We print no rate. | ||
| Costs attached to the route itself | Processing and documentation charges, legal and technical verification charges, and often an insurance the lender asks for. Each is a lender-set figure, disclosed in the schedule of charges; we publish none of them. | None of the above. The transaction costs of registration and stamp duty apply to both routes equally, and are set by the state's registration department, not by us. |
Settled by The lender's schedule of charges, and for stamp and registration, the registration department of the state the property is in. Where the current figure is published Karnataka Department of Stamps and Registration — the stamp duty and registration fee applicable in Karnataka, and the guideline values used to assess them. We print no rate. | ||
| Whether the cost can change after you sign | It can, if the loan is on a floating rate: the instalment or the tenure moves when the benchmark resets, on the mechanics the RBI's directions on external benchmark linked lending set out. Ask what the benchmark is, how often it resets, and whether a reset changes your instalment or your tenure. | It cannot. There is nothing to reset. |
Settled by The loan agreement's interest clause and the lender's key facts statement. The framework governing resets is published by the Reserve Bank of India. Where the current figure is published Reserve Bank of India — the prudential directions lenders work within, including loan-to-value norms and the rules on how floating rates are reset. We print no rate. | ||
| Tax treatment | A housing loan carries deductions under the Income Tax Act on interest and on principal, subject to conditions, limits and the regime you are taxed under. Which of them you can actually use depends on your own position, and the limits change with the Finance Act. | No loan-related deduction, because there is no loan. GST on an under-construction purchase applies either way, on the position the CBIC publishes. |
Settled by The Income Tax Department for deductions and the CBIC for GST, read for the year you are actually transacting in — and a chartered accountant for your own position. Where the current figure is published Income Tax Department — the deductions available on a housing loan and the conditions attached to each of them. We print no rate. | ||
| What it does to your flexibility | Leaves capital in your hands and takes future income out of them. A prepayment may or may not carry a charge depending on the product and the borrower type, on the position the RBI's directions set out — ask before you assume you can clear it early for free. | Converts liquid capital into an illiquid asset. Property cannot be sold in part, and it cannot be sold quickly on your timetable. |
Settled by The prepayment and foreclosure clauses of the loan agreement, read against the RBI's applicable directions. Where the current figure is published Reserve Bank of India — the prudential directions lenders work within, including loan-to-value norms and the rules on how floating rates are reset. We print no rate. | ||
| What goes wrong, and to whom | Default consequences run against the property, because it is the security. Insurance, an emergency reserve and a realistic view of income stability are the mitigations, and they are yours to arrange. | No default risk. The whole of the concentration risk is yours instead: a large share of your net worth sits in one asset, in one location, subject to one project's execution. |
Settled by Nothing documentary. This row is a description of exposure, not a prediction — and it is the row on which you should take advice rather than read a website. | ||
| What it changes for the seller | A sale conditional on a lender's sanction and disbursement timetable, so the promoter's documents must satisfy a third party as well as you. A registered project is generally used to this. | A simpler transaction with fewer parties. It does not entitle you to a discount, and any suggestion that it does belongs in a negotiation rather than on a comparison page. |
Settled by The agreement for sale's conditions and payment schedule, whichever route you take. | ||
Several terms above — undivided share, carpet area, occupancy certificate, encumbrance certificate, khata, FAR — are defined in full, with the statutory wording where a statute defines them, in our glossary.
Neither answer is the right one
Two paragraphs, one for each side, and then the honest weaknesses of both. We are not going to end this page by recommending the thing we happen to sell more of.
Borrowing suits someone with stable income who would rather keep capital available than sink it, who values a lender's independent look at the title, and who has read the loan agreement — including the reset, prepayment and charges clauses — rather than only the sanction letter.
Buying outright suits someone who has the capital genuinely spare, who does not want a long obligation attached to their income, and who will commission proper independent diligence rather than assume that the absence of a lender means there is nothing to check.
Stated plainly, because a comparison that lists only advantages on both sides has told you nothing. Neither of these paragraphs is a reason not to buy — they are the things worth knowing before you do.
A long obligation that does not care about your circumstances, a cost that can move if the rate is floating, charges attached to the route itself, your documents held by someone else for years, and a release step at the end that is easy to leave undone.
No third party checks the title unless you pay for one, a large share of your net worth sits in a single illiquid asset, and the money is committed with none of the optionality that keeping it would have preserved.
Take these with you
Every one of these has an answer that exists on paper. A seller who cannot produce the paper has given you an answer of a different kind.
Ask us for the registration certificate, the sanctioned plan, the encumbrance certificate, the draft agreement and the carpet area. We would far rather answer a well-informed question than an easy one.
