Key points
- Banks cap all your EMIs at roughly 40%–60% of net monthly income — the FOIR.
- On ₹1 lakh take-home with a ₹10,000 existing EMI, a 50% FOIR allows about ₹46 lakh at 8.5% for 20 years.
- RBI caps the loan at 75%–90% of the property value, depending on the loan size.
- A co-applicant’s income, a longer tenure or clearing small loans raises eligibility.
The three limits
- Income (FOIR): lenders keep your total EMIs — including the new loan — within a fixed share of your net monthly income, typically 40%–60% depending on income level and lender.
- Property value (LTV): RBI limits a home loan to 90% of the property value up to ₹30 lakh, 80% from ₹30 lakh to ₹75 lakh, and 75% above that.
- Age and tenure: the loan usually has to end by 60 for salaried borrowers or 65–70 for the self-employed.
You get the lowest of the amounts these limits allow.
Worked example
Take-home pay ₹1,00,000 a month; existing car loan EMI ₹10,000; FOIR 50%. The lender allows total EMIs of ₹50,000, leaving ₹40,000 for the home loan. At 8.5%, ₹40,000 a month supports:
| Tenure | Eligible loan |
|---|---|
| 20 years | ≈ ₹46.1 lakh |
| 25 years | ≈ ₹49.7 lakh |
| 30 years | ≈ ₹52.0 lakh |
On a take-home of ₹60,000 with no existing loans, the same 50% FOIR supports about ₹34.6 lakh over 20 years. Add a spouse earning ₹60,000 as co-applicant and the combined ₹1.6 lakh income (with the ₹10,000 EMI) supports around ₹80 lakh.
How to improve your eligibility
- Add an earning co-applicant — usually a spouse or parent who is also a co-owner.
- Close small loans and credit card EMIs before applying; each ₹5,000 of EMI cleared adds roughly ₹5.8 lakh of eligibility at 8.5% over 20 years.
- Choose a longer tenure, then prepay later.
- Keep your credit score above about 750 for better rates — a 1% lower rate raises eligibility by around 7%.
- Declare all regular income, including rental income and stable variable pay, with documents.
What lenders check besides income
- Credit score and history: most banks look for a CIBIL score of about 750 or more for their best rates; recent missed payments or many recent loan enquiries count against you.
- Job stability: salaried applicants usually need two to three years of total experience and some time with the current employer; the self-employed usually need two to three years of income tax returns.
- The property: legal title, approved building plans and the builder’s approvals are verified, and the bank values the property independently. The loan-to-value limit is applied to the bank’s valuation, not to the price you agreed.
- Age: the loan normally has to end by 60 for salaried borrowers (sometimes 65) and 65–70 for the self-employed, which can shorten the tenure — and the eligible amount — for older applicants.
Documents you will typically need
- Identity and address proof (PAN, Aadhaar, passport).
- Salary slips for 3–6 months, Form 16 and 6–12 months of bank statements (salaried).
- Income tax returns with computation for 2–3 years, business financials and bank statements (self-employed).
- Property documents: sale agreement, title deeds, approved plan, builder NOC and payment receipts.
Frequently asked questions
What is FOIR?
Fixed obligations to income ratio: the share of your net monthly income that goes to EMIs (including the new loan). Lenders usually cap it between 40% and 60%, allowing a higher share for higher incomes.
Does my spouse’s income count?
Yes, if your spouse joins as a co-applicant. Their income is added and their existing EMIs are counted, which usually raises the eligible amount. Making them a co-owner also lets both of you claim tax benefits.
Can I get a home loan for the full property price?
No. RBI limits home loans to 75%–90% of the property value, depending on the loan size, and stamp duty and registration are generally excluded for homes above ₹10 lakh. You need to fund the rest yourself.