How banks size a home loan
Banks start from the EMI you can afford, not the loan. They allow all your EMIs together to take up to a set share of your take-home pay, the FOIR (fixed obligations to income ratio), often 40–50% and up to 60–65% for higher incomes. Take away the EMIs you already pay, and what's left is the most the home loan's EMI can be. The loan is the amount that EMI repays over the tenure at the interest rate.
- Tenure: a longer tenure means a bigger loan for the same EMI, but far more interest. Most banks want it repaid by 60 (65 for the self-employed).
- Loan-to-value: RBI lets banks lend up to 90% of a home worth ₹30 lakh or less, 80% up to ₹75 lakh and 75% above, so you pay the rest, plus stamp duty and registration, yourself.
- Raising eligibility: add a co-applicant's income, close small loans first, or choose a longer tenure. A good credit score gets a better rate.
Being eligible for a loan isn't the same as being able to afford it comfortably. See the full cost with the EMI calculator, and whether buying beats renting with the rent vs buy calculator.
An estimate only. Each bank has its own rules on income, credit score, age, job and property; only a sanction letter tells you what you'll actually get.
Results are estimates for illustration only, not financial advice. Banks and schemes may round, apply TDS or use slightly different day counts — confirm figures with your bank or employer. Written by the Welthr team; last reviewed on .