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 ₹36.6 lakh. At 80% LTV the bank funds 80% of the property, so you would need about ₹9.15 lakh as down payment on a ₹45.8 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.
What EMI-to-income ratio do lenders use?
Most lenders cap your total EMIs (the FOIR) at about 40–50% of net monthly income. Higher income and a clean credit history can push this toward the upper end.
Does a longer tenure increase my eligibility?
Yes — a longer tenure lowers the monthly EMI, so the same income supports a larger loan. The trade-off is more total interest paid over the life of the loan.
Want the theory behind the numbers? Read our home loan guides on the Money Blog.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 4 Oct 2026. How we check these numbers.