\nOn offer of Possession<\/td>\n | 5% of BSP + 50% Additional Charges+ Other Charges (if any)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/h3>\nAssumptions:<\/h3>\nWe assume that the Opportunity cost<\/strong> (The returns you would generate by investing some where else like Mutual Funds, Fixed Deposit or your Business) for the down payment is 10% per annum\u00a0<\/strong>– which is equal to the average Home Loan Rates.<\/p>\nFor Construction Linked Plan each installment is due at equal intervals of 3.25 months<\/em><\/p>\nCalculations:<\/h3>\n\n\n\nPLAN A<\/strong><\/td>\nDown\u00a0Payment Plan\u00a0(12% Rebate on BSP)<\/strong><\/td>\n# of Months<\/strong><\/td>\nPayments Made<\/strong><\/td>\nPresent Value of Payment<\/strong><\/td>\n<\/tr>\n\nAt the time of Booking \/Allotment<\/td>\n | Rs. 2.5 lac.<\/td>\n | 0<\/td>\n | 2,50,000<\/td>\n | 2,50,000<\/td>\n<\/tr>\n | \nWithin 45 days of Booking<\/td>\n | 20% including booking Amount<\/td>\n | 1.5<\/td>\n | 1,94,136<\/td>\n | 1,91,734<\/td>\n<\/tr>\n | \nWith in 60 Days of Booking \/\u00a0Allotment<\/td>\n | 75% of BSP + 50% Additional Charges<\/td>\n | 2<\/td>\n | 18,53,910<\/td>\n | 18,23,393<\/td>\n<\/tr>\n | \nOn Offer of Possession<\/td>\n | 5% of BSP + 50% Additional Charges+ Other Charges (if any)<\/td>\n | 35.5<\/td>\n | 2,99,434<\/td>\n | 2,23,026<\/td>\n<\/tr>\n | \nPresent Value of All the Payments Made<\/strong><\/td>\n2,488,153\u00a0<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n \n\n\nPLAN B<\/strong><\/td>\nInterest Free Construction Linked Installment Plan.<\/strong><\/td>\n# of Months<\/strong><\/td>\nPayments Made<\/strong><\/td>\nPresent Value of Payment<\/strong><\/td>\n<\/tr>\n\nAt the time of Booking \/Allotment<\/td>\n | Rs. 2.5 lac.<\/td>\n | 0<\/td>\n | 2,50,000<\/td>\n | 2,50,000<\/td>\n<\/tr>\n | \nWithin 45 Days of Booking \/\u00a0Allotment<\/td>\n | 20% including booking amount<\/td>\n | 1.5<\/td>\n | 2,54,700<\/td>\n | 2,51,549<\/td>\n<\/tr>\n | \nOn start of excavation<\/td>\n | 10% BSP<\/td>\n | 3<\/td>\n | 2,52,350<\/td>\n | 2,46,145<\/td>\n<\/tr>\n | \nOn Casting of Stilt Roof<\/td>\n | 10% BSP + 50% EDC & IDC<\/td>\n | 6.25<\/td>\n | 3,65,750<\/td>\n | 3,47,263<\/td>\n<\/tr>\n | \nOn Casting of First Floor Roof<\/td>\n | 10% BSP<\/td>\n | 9.5<\/td>\n | 2,52,350<\/td>\n | 2,33,219<\/td>\n<\/tr>\n | \nOn Casting of Third Floor Roof<\/td>\n | 10% BSP<\/td>\n | 12.75<\/td>\n | 2,52,350<\/td>\n | 2,27,013<\/td>\n<\/tr>\n | \nOn Casting of Sixth Floor Roof<\/td>\n | 7.5% of BSP+50% Additional Charges + 100% PLC (if any)<\/td>\n | 16<\/td>\n | 2,64,263<\/td>\n | 2,31,403<\/td>\n<\/tr>\n | \nOn Casting of Ninth Floor Roof<\/td>\n | 7.5% of BSP<\/td>\n | 19.25<\/td>\n | 1,89,263<\/td>\n | 1,61,319<\/td>\n<\/tr>\n | \nOn Completion of RCC Structure<\/td>\n | 5% of BSP<\/td>\n | 22.5<\/td>\n | 1,26,175<\/td>\n | 1,04,684<\/td>\n<\/tr>\n | \nOn Completion of Internal Plaster<\/td>\n | 5% of BSP<\/td>\n | 25.75<\/td>\n | 1,26,175<\/td>\n | 1,01,898<\/td>\n<\/tr>\n | \nOn Completion of External Plaster<\/td>\n | 5% of BSP<\/td>\n | 29<\/td>\n | 1,26,175<\/td>\n | 99,187<\/td>\n<\/tr>\n | \nOn Completion of Flooring<\/td>\n | 5% of BSP + 50% EDC & IDC<\/td>\n | 32.25<\/td>\n | 2,39,575<\/td>\n | 1,83,319<\/td>\n<\/tr>\n | \nOn offer of Possession<\/td>\n | 5% of BSP + 50% Additional Charges+ Other Charges (if any)<\/td>\n | 35.5<\/td>\n | 2,01,175<\/td>\n | 1,49,840<\/td>\n<\/tr>\n | \n\u00a0Present Value of All the Payments Made<\/strong><\/td>\n2,586,840<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n \u00a0Total Cost:<\/strong><\/p>\n\n- Plan A:<\/strong> Rs. 2,488,153<\/li>\n
- Plan B:<\/strong> Rs. 2,586,840<\/li>\n<\/ol>\n
Actual Gain if you take plan A: Rs. 98,686 \u2013 or 3.97%<\/span><\/p>\nSome More Scenarios:<\/h2>\nQuestion 1:\u00a0What if the project gets delayed? Below is table showing the loss\/gain you would make if you choose Plan A over B<\/span>.<\/p>\n\n\n\nYears to Possession<\/strong><\/td>\nPlan B Cost<\/strong><\/td>\nPlan A Cost<\/strong><\/td>\nPlan B – Plan A<\/strong><\/td>\n% gain<\/strong><\/td>\n<\/tr>\n\n2<\/td>\n | 26,78,215<\/td>\n | 25,12,532<\/td>\n | 1,65,684<\/td>\n | 6.59%<\/td>\n<\/tr>\n | \n3<\/strong><\/td>\n25,86,840<\/strong><\/td>\n24,88,153<\/strong><\/td>\n98,686<\/strong><\/td>\n3.97%<\/strong><\/td>\n<\/tr>\n\n4<\/td>\n | 24,84,910<\/td>\n | 24,67,013<\/td>\n | 17,897<\/td>\n | 0.73%<\/td>\n<\/tr>\n | \n5<\/td>\n | 24,05,382<\/td>\n | 24,47,120<\/td>\n | -41,738<\/td>\n | -1.71%<\/td>\n<\/tr>\n | \n6<\/td>\n | 23,30,237<\/td>\n | 24,31,243<\/td>\n | -1,01,006<\/td>\n | -4.15%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n If Omaxe gives you early possession in 2 years you would be gaining 6.5% while if it delays the project by 1 year & you get the possession in 4 years, you would gain 0.75%. If there is further delay you would be actually making losses.<\/em><\/p>\nQuestion 2:<\/strong>\u00a0What if my opportunity cost is not 10% but 8% or 12% per annum?<\/span><\/p>\nI have assumed that you get possession in 3 years as promised. Below table shows how much you gain depending on your opportunity cost.<\/p>\n \n\n\nOpportunity cost<\/strong><\/td>\nPlan B Cost<\/strong><\/td>\nPlan A Cost<\/strong><\/td>\nPlan B – Plan A<\/strong><\/td>\n% gain<\/strong><\/td>\n<\/tr>\n\n8%<\/td>\n | 26,44,645<\/td>\n | 25,08,162<\/td>\n | 1,36,483<\/td>\n | 5.44%<\/td>\n<\/tr>\n | \n9%<\/td>\n | 26,15,459<\/td>\n | 24,98,052<\/td>\n | 1,17,407<\/td>\n | 4.70%<\/td>\n<\/tr>\n | \n10%<\/strong><\/td>\n25,86,840<\/strong><\/td>\n24,88,153<\/strong><\/td>\n98,686<\/strong><\/td>\n3.97%<\/strong><\/td>\n<\/tr>\n\n11%<\/td>\n | 25,58,775<\/td>\n | 24,78,460<\/td>\n | 80,315<\/td>\n | 3.24%<\/td>\n<\/tr>\n | \n12%<\/td>\n | 25,31,251<\/td>\n | 24,68,966<\/td>\n | 62,285<\/td>\n | 2.52%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n So we see that as opportunity cost (or home loan interest rate) goes up you make lower gains. Above 15% you would be making losses by choosing Plan A.<\/em><\/p>\nQuestion 3:<\/strong>\u00a0What if my builder is offering me 8% or 15% discount for upfront Payment?<\/span><\/p>\nThe table below shows Actual Gains you make on the stated rate of discount by the builder, assuming that the project is completed in 3 years & your opportunity cost is 10%.<\/p>\n \n\n\nDiscount Rate<\/strong><\/td>\nPlan B Cost<\/strong><\/td>\nPlan A Cost<\/strong><\/td>\nPlan B – Plan A<\/strong><\/td>\n% gain<\/strong><\/td>\n<\/tr>\n\n8%<\/td>\n | 25,86,840<\/td>\n | 25,86,310<\/td>\n | 530<\/td>\n | 0.02%<\/td>\n<\/tr>\n | \n10%<\/td>\n | 25,86,840<\/td>\n | 25,37,232<\/td>\n | 49,608<\/td>\n | 1.96%<\/td>\n<\/tr>\n | \n12%<\/td>\n | 25,86,840<\/td>\n | 24,88,153<\/td>\n | 98,686<\/td>\n | 3.97%<\/td>\n<\/tr>\n | \n15%<\/td>\n | 25,86,840<\/td>\n | 24,14,536<\/td>\n | 1,72,304<\/td>\n | 7.14%<\/td>\n<\/tr>\n | \n20%<\/td>\n | 25,86,840<\/td>\n | 22,91,841<\/td>\n | 2,94,999<\/td>\n | 12.87%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n At higher discount rate say 15%+, it totally depends on your risk profile \u2013 are you willing to take the risk for the gains you would make!<\/em><\/p>\nTo conclude<\/h2>\nWhat appears to be 12% discount by taking Down Payment Plan actually turns out to be 4% in real terms. Moreover Down Payment Plan is very high risk plan. Also if the Possession is delayed by even 1 year you make no gain and after 1 year delay you actually are sitting on a loss.<\/p>\n So it always makes sense to choose Construction Linked Installment Plan.<\/p>\n","protected":false},"excerpt":{"rendered":" One of my friends had shortlisted his dream Home but was confused which payment plan to follow. There are usually three payment Plans. Upfront payment: You pay the builder around 95% of cost upfront with some discount & rest at the time of possession. Construction Linked Installment Plan: You pay certain % of cost […]<\/p>\n","protected":false},"author":1,"featured_media":4890,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[9],"tags":[42,2320,44,45,46],"uagb_featured_image_src":{"full":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2013\/05\/Down-payment-or-Construction-Linked-\u2013-Which-Plan-to-Choose.png",597,366,false],"thumbnail":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2013\/05\/Down-payment-or-Construction-Linked-\u2013-Which-Plan-to-Choose-150x150.png",150,150,true],"medium":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2013\/05\/Down-payment-or-Construction-Linked-\u2013-Which-Plan-to-Choose-300x183.png",300,183,true],"medium_large":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2013\/05\/Down-payment-or-Construction-Linked-\u2013-Which-Plan-to-Choose.png",597,366,false],"large":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2013\/05\/Down-payment-or-Construction-Linked-\u2013-Which-Plan-to-Choose.png",597,366,false],"1536x1536":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2013\/05\/Down-payment-or-Construction-Linked-\u2013-Which-Plan-to-Choose.png",597,366,false],"2048x2048":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2013\/05\/Down-payment-or-Construction-Linked-\u2013-Which-Plan-to-Choose.png",597,366,false],"yarpp-thumbnail":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2013\/05\/Down-payment-or-Construction-Linked-\u2013-Which-Plan-to-Choose.png",120,74,false]},"uagb_author_info":{"display_name":"Amit","author_link":"https:\/\/www.apnaplan.com\/author\/admin\/"},"uagb_comment_info":5,"uagb_excerpt":" One of my friends had shortlisted his dream Home but was confused which payment plan to follow. There are usually three payment Plans. Upfront payment: You pay the builder around 95% of cost upfront with some discount & rest at the time of possession. Construction Linked Installment Plan: You pay certain % of cost…","_links":{"self":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/147"}],"collection":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/comments?post=147"}],"version-history":[{"count":0,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/147\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media\/4890"}],"wp:attachment":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media?parent=147"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/categories?post=147"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/tags?post=147"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |