How Much Home Loan Can You Get?

How lenders calculate home loan eligibility using income, existing EMIs and credit scores, and how borrowers can improve their chances.

Lenders use a few key measures to decide how much they’ll lend.

FOIR

The fixed obligations to income ratio (FOIR) compares all monthly EMIs, including the new home loan, to monthly income. Many lenders cap FOIR at around 50 to 60 percent of net income, depending on income level.

Example: with a net monthly income of 1 lakh rupees and a 50 percent FOIR limit, total EMIs can be up to 50,000 rupees. If you already pay a 10,000 rupee car EMI, the home loan EMI can be up to 40,000.

Credit score

A higher credit score, often 750 or above on CIBIL, improves approval chances and can secure lower interest rates.

Age and tenure

Younger borrowers can get longer tenures, lowering EMIs and raising eligibility.

Ways to improve eligibility

Add a co-applicant, such as an earning spouse, combining incomes.
Pay off existing small loans or credit card balances.
Choose a longer tenure (but mind total interest).
Improve your credit score by paying bills on time.
Make a larger down payment.

Don’t borrow the maximum

Just because a bank will lend a certain amount doesn’t mean you should borrow it. Consider:

Emergency fund needs.
Other goals, such as children’s education.
Job security.
Possible interest rate rises.

A common guide is to keep total EMIs well within your comfort level, often below around 40 percent of take-home pay.

The co-applicant boost

A young engineer qualifies for a 35 lakh loan on her own. Adding her working spouse as a co-applicant raises eligibility to 60 lakh. They choose a 45 lakh loan, keeping EMIs comfortable.

Thinking the maximum eligible loan is a safe amount

Borrowing the maximum can leave little room for emergencies or rate rises.

Key takeaways

Lenders cap total EMIs as a share of income, often around 50 to 60 percent.
Credit scores of 750 or above help approval and rates.
Co-applicants, clearing small loans and longer tenures raise eligibility.
Borrow comfortably below the maximum.