How much home loan can you afford?
Keep total EMIs under 40% of net income. On ₹1,00,000/month that's a ₹40,000 EMI, funding a home loan of about ₹46.1 L at 8.5% over 20 years, a property near ₹57.6 L with 20% down. Already paying a car EMI? Subtract it first.
What the bank actually checks
"How much can I borrow?" has a precise answer, and it starts with a ratio bankers call FOIR (Fixed Obligation to Income Ratio). Add up every monthly loan payment you already have, add the proposed home-loan EMI, and divide by your net income. Lenders want that number under roughly 40-50%. Everything else (your salary, your other loans, the interest rate, the tenure) feeds into that one constraint. Work it backwards and you get your maximum loan: take 40% of income as the EMI ceiling, then find the loan whose EMI equals it.
Here's that calculation run across income levels, at the current 8.5% for a 20-year loan, assuming no other EMIs and a 20% down payment:
| Net monthly income | Max EMI (40%) | Home loan | Property (20% down) |
|---|---|---|---|
| ₹50,000 | ₹20,000 | ₹23.0 L | ₹28.8 L |
| ₹75,000 | ₹30,000 | ₹34.6 L | ₹43.2 L |
| ₹1,00,000 | ₹40,000 | ₹46.1 L | ₹57.6 L |
| ₹1,50,000 | ₹60,000 | ₹69.1 L | ₹86.4 L |
| ₹2,00,000 | ₹80,000 | ₹92.2 L | ₹1.15 Cr |
| ₹3,00,000 | ₹1,20,000 | ₹1.38 Cr | ₹1.73 Cr |
Illustrative, at 8.5% for 20 years with no existing EMIs. Your actual eligibility depends on credit score, age, employer, and current rates. Use the EMI calculator to model your exact numbers.
The gap between "can" and "should"
The table shows what a bank will approve. What you should actually borrow is usually less. A max-FOIR loan leaves no cash for stamp duty and registration (which the loan can't cover, often another 6-8% of the property), no emergency fund, and no cushion if a floating rate ticks up. The comfortable version of the rule: home-loan EMI alone under 30-35% of net income, all EMIs under 40%, and six months of expenses still in the bank after you've paid the down payment. Borrow to the second number, not the first. The house you can barely afford is the one that owns you.