Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs

SUPPORT

Menu  
 
Apply Now
Apply Now

Tata Capital > Blog > Loan for Home > What is the OCR amount in a Home Loan?

Loan for Home

What is the OCR amount in a Home Loan?

What is the OCR amount in a Home Loan?

Purchasing a home is an exciting venture for many. For most, buying a new home requires financing in the form of home loans. When applying for a home loan, most lenders and financial institutions require borrowers to specify how much of the amount they will be paying themselves, also known as the borrower’s “own contribution.”

A buyer’s own contribution is a crucial part of the application and approval process of getting a home loan. In this article, we delve into the specifics of the OCR amount in home loans, why it is essential, and more.

What is the OC in Home Loans?

Before understanding what an OCR is, it is essential to first understand what the term OC means. When getting a home loan, OC refers to the buyer’s contribution. It is the amount of money that buyers must pay upfront from their pockets to contribute towards purchasing the home or property.

This is usually a certain percentage of the house or property’s total market value, and is often referred to as a “downpayment” on the home. It is typically paid to the property’s builder or seller, and makes the buyer eligible for a home loan.

Also, read – Token money: Meaning, purpose & important things to know

What is OCR in Home Loans?

The OCR full form in home loans is “Own Contribution Receipt.” Once you have paid your contribution or down payment, the builder or seller of the house or property will issue you a receipt. This receipt is known as the OCR or Own Contribution Receipt. In some cases, it may be referred to as the Margin Money receipt or MMM.

The OCR is a crucial document on a buyer’s journey towards home ownership. The OCR is proof for home loan, meaning many lenders require it during the loan approval process. This is because it displays your commitment to purchasing the property for which you seek a home loan. A buyer’s contribution towards the amount also reduces the risk faced by the financial institution from which they seek a loan.

Once the OCR has been presented to your financial institution, the remaining amount of the house or property can then be approved via a home loan.

Also, read – Pledge vs hypothecation vs mortgage: Key differences

OCR Full Form in Finance and Its Role in Home Loans

In the context of home loans, OCR full form is Own Contribution Receipt. It documents the down-payment you pay from your own funds before the lender disburses the loan. The OCR meaning in home loan reflects your personal commitment toward the property cost, signalling to the lender that you’ve contributed the required share. 

Providing a valid own contribution receipt (or OCR) is often mandatory for loan approval. By showing you’ve made the mandated upfront payment, the OCR reduces lender risk and helps secure better loan terms. Understanding what is OCR in loan ensures you comply with financing requirements and avoid delays.

Also, read – Can you claim home loan interest tax benefits before possession?

Documents Required for Own Contribution Verification

For home loan processing, lenders ask for specific OCR documents required to verify that the buyer has paid their share of the property cost

  • Builder Payment Receipts – Primary proof of own contribution showing the amount paid.
  • Bank Statements – Reflecting the debit entry for the down payment.
  • Cheque Copies – Part of essential OCR documents required for verification.
  • RTGS/NEFT/IMPS Slips – Digital own contribution verification papers confirming fund transfer.
  • Demand Letter & Sale Agreement – Supporting documents often requested by lenders.
  • Transaction Acknowledgement from Builder – Additional home loan OCR documentation for clarity.

Also, read – Understanding Home Loan Settlement: What You Need to Know

How to Obtain and Use Your Own Contribution Receipt (OCR)

Follow these steps to get OCR receipt when buying a property:

  • Make Your Down Payment: Make your own contribution to the builder or seller through bank transfer or cheque.
  • Request the OCR: Ask the builder for an official receipt. This is your OCR receipt.
  • Collect Payment Proof: Save bank statements, NEFT/RTGS slips, or cheque copies that support the receipt.
  • Submit OCR to Lender: Provide the receipt as part of the OCR documentation when you obtain OCR for home loan processing.
  • Lender Verification: The bank verifies the payment as part of the OCR process in home loan approval.
  • Loan Disbursal: Once verified, the lender proceeds with disbursing the home loan.

Also, read – What is Home Loan Prepayment and How Does it Work?

What Should the Minimum Own Contribution be?

As per the regulations set by the Reserve Bank of India (RBI), the minimum contribution towards your home or property varies depending on the house’s cost and the loan amount you seek. The latest regulations also put a limit on how much a financial institution can lend—as per these rules, they can only finance a maximum of 90% of the entire value of the property for properties worth up to Rs. 30 lakhs.

For loans worth between Rs. 30 lakhs and Rs. 75 lakhs, a financial institution’s maximum contribution is 80% of the property’s value. Loans above Rs. 75 lakhs may contribute up to 75% of the value of the property, and the buyer has to cover the remaining amount.

Thus, depending on the value of your property and loan amount, your minimum OCR could be as low as 10%. It is important to remember that the purpose of the OCR is to lower the loan amounts buyers require as well as increase their engagement in the property.

For example, if your property is worth Rs. 25,00,000, the maximum loan amount you can get is Rs. 2,25,000. Your minimum OC (Own Contribution) must be around Rs. 2,50,000, or 10% of the property’s value. Using a calculator for housing loans can be helpful in determining your EMIs and more.

The table below shows how the minimum OCR changes based on the property value and loan amount:

Property ValueMaximum Loan Amount (Loan-to-Value Ratio)Minimum OC (Own Contrubution)
Up to Rs. 30 Lakhs90%10%
Rs. 30 Lakhs to Rs. 75 Lakhs80%20%
More than Rs. 75 Lakhs75%25%

Also, read – How a Bounced Cheque Will Reduce Your CIBIL Score?

What Happens if the OCR Amount Cannot be Met?

In today’s market, collecting the funds required to make your own contribution amount can be challenging with constant fluctuations in real estate prices. In such a scenario, one can use a few different methods. These include:

1. Waiting to raise funds

The first way to deal with high OC amounts is to take the time to collect the required funding.

2. Using personal loans

Another common way to fund your OC is to utilise personal loans. However, this would require you to pay two different EMIs—one for the personal loan and one for the home loan. This could be a financial burden or negatively affect your credit history.

3. Construction-linked home loan

The final option is to purchase a property using a construction-linked home loan. Construction-linked plans typically have five stages. At every stage, the property buyer pays a pre-determined amount as their OCR, and the lending financial institution disburses the remaining amount.

The Bottom Line

Buying and financing a new home can come with its own challenges. However, proper financial planning and research can make this process much more streamlined and smooth, making it easier and quicker.

If you want to finance a new property purchase, consider a home loan from Tata Capital. We offer attractive interest rates, high amounts, flexible tenures, and more. Head to the Tata Capital website or download the app today to learn more!

Say Hello to Your New Home with Our Easy Home Loans!

Apply now
Popular Searches
PMAY Calculator Home Loan for Government Employee Home Loan for Self Employed Home Loan for Women Home Loan Balance Transfer with Top Up Area Calculator Stamp Duty Calculator Home Loan Top Up Approved Housing Projects in India 12 Lakh Home Loan 15 Lakh Home Loan 25 Lakh Home Loan 30 Lakh Home Loan 35 Lakh Home Loan 40 Lakh Home Loan 45 Lakh Home Loan 60 Lakh Home Loan 65 Lakh Home Loan 70 Lakh Home Loan 75 Lakh Home Loan 80 Lakh Home Loan 85 Lakh Home Loan 90 Lakh Home Loan 1.5 Crore Home Loan 2 Crore Home Loan 2.5 Crore Home Loan 3 Crore Home Loan 4 Crore Home Loan
More About Loans
home loan Home Extension Loan Affordable Housing Loan Pradhan Mantri Awas Yojana Home Construction Loan Home Loan Balance Transfer Documents Required for Home Loan Home Loan Interest Rates Home Loan EMI Calculator Home Loan Eligibility 10 Lakh Home Loan 50 Lakh Home Loan 30 Lakh Home Loan 40 Lakh Home Loan

FAQs

What is OCR clearance in a home loan?

OCR refers to the "Own Contribution Receipt," which lenders will use to verify your contribution towards the purchase of a property. These help to approve home loans.

How to calculate OCR in home loan?

The OCR amount calculation will vary depending on the value of the property. It could range from 10% to 25% or more, based on the buyer's availability of funds.

What is the interest rate of OCR?

OCR and home loan interest rates will vary depending on the ending institution, borrower, and property value. At Tata Capital, home loan interest rates can be as low as 8.75% per annum.

What happens if I cannot pay the OCR amount?

 

If you cannot pay the OCR in home loan, the lender will not release the amount. OCR is mandatory proof that you’ve paid your share of the property cost. Without it, loan approval may be delayed, reduced, or rejected.

How does OCR affect home loan sanction?

 

The own contribution receipt directly influences home loan sanction because lenders verify that you’ve contributed the required share from your own funds. Providing a valid OCR strengthens your application, reduces lender risk, and ensures smooth disbursal of the sanctioned amount.

Is OCR the same as down payment?

 

Yes. OCR represents the receipt for your down payment or “own contribution” toward the property. It’s simply the formal proof that you’ve paid your portion before the lender finances the remaining amount.

Can OCR amount be funded by a personal loan?

 

Most lenders do not allow the own contribution amount to be funded through a personal loan. OCR must ideally come from your own savings. If the down payment is borrowed, the lender may view it as higher risk and may reduce or deny the home loan.

Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Home Loan EMI Calculator

Business Loan EMI Calculator

Used Car Loan EMI Calculator

Two Wheeler Loan EMI Calculator

Loan Against Securities Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Private Equity Funds

Useful Links and Resources

Policies, Codes & Other Documents

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download