How banks decide your loan amount
- EMI limit (FOIR): all your EMIs together are usually kept within 40–60% of net monthly income, depending on how much you earn and the bank.
- Loan from EMI: the bank works backwards from that EMI using its rate and the longest tenure you qualify for.
- Property value cap: RBI allows at most 90% of the property value for loans up to ₹30 lakh, 80% up to ₹75 lakh and 75% above. The rest is your down payment.
With ₹75,000 take-home and no other loans, a 50% limit allows a ₹37,500 EMI, which supports about ₹43.21 lakh over 20 years at 8.5%.
How to get a bigger loan
- Close or prepay small loans first; each ₹5,000 of EMI cleared adds about ₹5.76 lakh of home loan eligibility.
- Add a co-applicant with income. It also lets both of you claim tax benefits in the old regime.
- Choose a longer tenure, and prepay later when you can.
- Check your credit report for errors before applying; a 750+ score gets the best rates.
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Questions people ask
What is FOIR?
Fixed Obligation to Income Ratio: the share of your monthly income that goes to EMIs. Banks use it to cap how much you can borrow.
Is eligibility based on gross or net salary?
Most banks use net take-home pay (after tax and PF), shown on your salary slip and bank statement.