How much home loan can you get?
Banks decide your home loan amount mainly by how much of your income can safely go towards EMIs. They measure this with FOIR (Fixed Obligation to Income Ratio) — the share of monthly income that goes to all fixed obligations, including the new loan. Most lenders allow roughly 40–60%.
The eligibility formula
Max EMI = (Net income × FOIR%) − Existing EMIs
Loan = Max EMI × ((1 + r)^n − 1) ÷ (r × (1 + r)^n)
r = monthly interest rate · n = months
The second line is the EMI formula turned around: instead of finding the EMI for a loan, it finds the loan that a given EMI can repay.
Worked example
₹80,000 income, ₹10,000 existing EMI, 50% FOIR, 8.5%, 20 years
- Total EMI capacity
- ₹40,000
- Max affordable new EMI
- ₹30,000
- Eligible loan amount
- ₹34,56,925
How to improve your eligibility
- Close or reduce existing loans — every rupee of EMI you clear adds to the amount you can borrow.
- Add a co-applicant with stable income, such as a spouse.
- Choose a longer tenure — but remember it raises total interest.
- Keep a healthy credit score (750+) for better rates and approval odds.
The bank also checks the property value: most lenders finance up to 75–90% of it, and you pay the rest as a down payment. Your final offer may be lower than this estimate.
Documents banks usually ask for
- Identity and address proof, plus recent passport-size photographs.
- Last 3 to 6 months of salary slips and 6 to 12 months of bank statements.
- Form 16 or income tax returns for the last two years.
- Property documents and, for self-employed applicants, business proofs.