How much home loan can you get on your salary
Banks decide your loan from repayment capacity, not the property price. The FOIR rule, how tenure and rate change the answer, RBI's loan-to-value caps and ways to raise your eligibility.
4 min read · Published 2026-10-31 · Last reviewed 2026-10-31
The first question every home buyer asks is "how much can I borrow?" The honest answer is that two limits apply at once, and the lower one wins: how much the bank thinks you can repay each month, and how much of the property's value the regulator lets the bank finance. This guide explains both so you can estimate your budget before you talk to a lender.
Limit one: repayment capacity
Lenders use a ratio with several names: fixed obligation to income ratio (FOIR), debt burden ratio or EMI-to-income ratio. It caps the share of your net monthly income that can go to EMIs on all your loans combined.
Typical FOIR bands:
| Net monthly income | FOIR most banks allow |
|---|---|
| Up to ₹50,000 | 40–45% |
| ₹50,000 to ₹1 lakh | 50% |
| ₹1 lakh to ₹2 lakh | 55% |
| Above ₹2 lakh | 60–65% |
Existing EMIs on a car loan, personal loan or credit card instalments are subtracted first. If you earn ₹1 lakh net and pay a ₹10,000 car EMI, a 50% FOIR leaves ₹40,000 a month for the home loan.
That affordable EMI is then converted into a loan amount using the interest rate and the longest tenure the bank will give you. The maths is the EMI formula run backwards:
Loan = EMI × ((1 + r)ⁿ − 1) ÷ (r × (1 + r)ⁿ), where r is the monthly rate and n the number of months.
At 8.5% for 20 years every ₹1,000 of EMI supports about ₹1.15 lakh of loan. So ₹40,000 of EMI supports roughly ₹46 lakh. Stretch to 30 years and the same EMI supports ₹52 lakh, at the cost of far more total interest.
Limit two: loan-to-value
RBI caps how much of the property's value a bank may lend:
| Property value | Maximum loan |
|---|---|
| Up to ₹30 lakh | 90% |
| ₹30 lakh to ₹75 lakh | 80% |
| Above ₹75 lakh | 75% |
Value means the lower of the agreement value and the bank's valuation, and it excludes stamp duty, registration and other charges. For a ₹1 crore flat the most any bank will lend is ₹75 lakh; the other ₹25 lakh plus roughly ₹8 lakh of charges must come from you.
Which limit binds
Take a buyer with ₹1.5 lakh net income, no other EMIs, FOIR 55%, 8.5% rate, 20-year tenure. Affordable EMI is ₹82,500, which supports about ₹95 lakh of loan. For a ₹1 crore flat, LTV limits the loan to ₹75 lakh, so LTV binds and the buyer needs ₹25 lakh plus charges in cash. For a ₹60 lakh flat, LTV allows ₹48 lakh and income allows ₹95 lakh, so LTV binds again and the down payment is ₹12 lakh. Only when the property is expensive relative to income does the income limit bind.
What else the bank checks
- Age and tenure. The loan must end by retirement, usually 60 for salaried and 65–70 for self-employed. A 45-year-old gets at most 15 years, which cuts the eligible amount sharply.
- Credit score. Below 700 most banks decline or add 0.25–1% to the rate; above 750 you get the advertised rate.
- Employer and income type. Salaried applicants at listed companies and government bodies get the highest FOIR. Self-employed applicants are assessed on average income tax returns, and cash income is usually ignored.
- Co-applicant income. A spouse or parent as co-applicant adds their net income to the FOIR calculation. This is the single biggest lever most buyers have.
- Rate buffer. Several banks assess eligibility at a notional rate 1–2% above the offer, so a floating-rate rise does not push you into default.
Ways to raise eligibility
- Add a co-applicant with income.
- Close small loans and credit card EMIs before applying; a ₹5,000 EMI costs you roughly ₹5.7 lakh of eligibility.
- Extend tenure, then prepay later. You can always shorten a loan; you cannot easily lengthen it.
- Include variable pay and allowances that appear on your payslip; most banks count 50–100% of them.
- Apply to a bank that already holds your salary account; relationship pricing and higher FOIR are common.
Do not borrow the maximum
Eligibility is what the bank will give you, not what you should take. A sensible ceiling is an EMI of 35–40% of take-home pay, leaving room for maintenance, insurance, children's costs and a rate rise. Floating rates moved 2.5 percentage points in 2022–23; on a ₹60 lakh loan that was about ₹9,000 a month.
Start with the loan eligibility calculator to get your range, check the monthly cost in the home loan EMI calculator, and if you are unsure of your net income use the CTC to in-hand calculator first.
Sources
This guide is general information, not financial, tax or legal advice. Rules change; the review date above tells you when it was last checked. See our editorial policy.