What is the Home Loan Eligibility?
Home loan eligibility is the maximum amount a lender will sanction based on your repayment capacity — not on the property price. Every bank applies a FOIR (Fixed Obligation to Income Ratio): the share of your net monthly income that may go to all EMIs combined, usually 40–55% depending on your income bracket.
The calculation is simply reversed EMI maths. The bank works out how much EMI your free income supports, then converts that EMI back into a loan amount at the offered rate and tenure. Higher income or longer tenure raises eligibility; existing EMIs reduce it rupee for rupee.
Formula & worked example
Eligibility is the present value of the EMI you can afford:
Loan = EMI × ((1 + i)N − 1) / (i × (1 + i)N)
Worked example: ₹80,000 net salary, 50% FOIR, ₹8,000 existing EMIs → affordable EMI = ₹40,000 − ₹8,000 = ₹32,000. At 8.6% for 20 years (i = 0.007167, N = 240) that supports a loan of roughly ₹36.8 lakh. At 80% LTV the bank funds 80% of the property, so you would need about ₹9.2 lakh as down payment on a ₹46 lakh home.
How to use this home loan eligibility calculator
- Enter your net take-home salary — the figure credited to your bank, not CTC.
- Add every existing EMI: car, personal, credit-card instalments and any loan you guaranteed.
- Set the FOIR your lender uses — 40% is conservative, 50–55% is common for higher salaries.
- Adjust rate and tenure to see how eligibility moves, and read the down payment you must arrange.
Smart tips
- Closing one small personal loan before applying can lift eligibility by several lakh — every ₹1,000 of EMI freed adds roughly ₹1.15 lakh of loan at 8.6%/20yr.
- Adding a co-applicant with income (spouse or parent) pools both salaries and is the fastest way to raise eligibility.
- Banks count only stable income. Variable pay and bonuses are usually averaged or discounted by 50%.
- A credit score above 750 gets you both the sanction and the best rate; below 700 expect a higher rate or rejection.
- Eligibility is a ceiling, not a target — borrowing the maximum leaves no room for a rate rise or job change.
Frequently asked questions
How much home loan can I get on a ₹50,000 salary?
At a 50% FOIR and no existing EMIs, ₹25,000 of EMI is affordable. At 8.6% over 20 years that is roughly ₹28.7 lakh of loan. Existing EMIs reduce this directly.
What is FOIR and why does it matter?
FOIR is the percentage of your net income a lender allows to go to all EMIs. Most banks cap it at 40–55%. It is the single biggest driver of eligibility, which is why clearing existing loans helps so much.
Does a longer tenure increase eligibility?
Yes. A longer tenure lowers the EMI for the same loan, so the same free income supports a larger amount. It also raises total interest substantially, so treat it as a trade-off.
Is the loan based on my CTC or take-home?
Take-home. Lenders use net salary credited after PF, tax and deductions, because that is what actually services the EMI.
How much down payment do I need?
Banks fund up to 75–90% of property value (LTV) depending on loan size. Budget 10–25% as down payment plus around 7–8% more for stamp duty, registration and processing fees.
Want the theory behind the numbers? Read our home loan guides on the Money Blog.