Home Loan Borrowing Power 2026 - How Much Can You Actually Get?
Buy vs Rent Team
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Key Takeaway / Executive Summary
How much home loan can you get based on your salary? A simple guide to how banks calculate eligibility, with real examples at different income levels.
A simple way to estimate your eligible loan amount
Before you start house-hunting, it helps to know roughly how much loan a bank will actually approve for you. Otherwise, you risk falling in love with a flat that's outside your realistic borrowing power. Here's how banks generally calculate this, in plain terms.
The Basic Idea: FOIR
Most Indian banks use something called FOIR - Fixed Obligations to Income Ratio - to decide how much EMI you can afford, and therefore how much loan you're eligible for.
In simple words: banks look at your monthly income, subtract your existing EMIs and financial obligations, and check what percentage of your income is left for a new home loan EMI. Most banks cap this at 40-50% of your monthly income, though the exact number varies by lender and by how much you earn.
A Simple Example
Let's say your monthly take-home salary is ā¹1,00,000, and you have no other loans running.
- Bank's typical cap: 45% of income for total EMIs
- Maximum comfortable EMI: ā¹45,000/month
At a 20-year loan tenure and roughly 7.75% interest, an EMI of ā¹45,000/month corresponds to an eligible loan amount of approximately ā¹54-55 lakh.
If you already had an existing car loan EMI of ā¹10,000/month, your remaining room for a home loan EMI would drop to about ā¹35,000/month - reducing your eligible loan amount to roughly ā¹42-43 lakh instead.
This is exactly why existing loans (car loans, personal loans, even large credit card dues) directly reduce how much home loan you can get - not just your salary.
Rough Borrowing Power by Monthly Income
Here's a simplified reference table, assuming no existing loans, a 45% FOIR cap, 20-year tenure, and roughly 7.75% interest:
| Monthly Take-Home Salary | Approx. Max EMI | Approx. Eligible Loan Amount |
|---|---|---|
| ā¹50,000 | ā¹22,500 | ā¹27 Lakh |
| ā¹75,000 | ā¹33,750 | ā¹41 Lakh |
| ā¹1,00,000 | ā¹45,000 | ā¹54-55 Lakh |
| ā¹1,50,000 | ā¹67,500 | ā¹82 Lakh |
| ā¹2,00,000 | ā¹90,000 | ā¹1.09 Cr |
Important: These are simplified estimates. Your actual eligibility depends on the specific bank's policy, your credit score, your age (which affects maximum tenure), co-applicant income if any, and other factors - always confirm your real eligibility with a bank directly rather than relying on a general table.
What Increases or Decreases Your Borrowing Power
Increases it:
- A co-applicant with steady income (spouse, parent) - their income can often be combined with yours for eligibility purposes
- A longer loan tenure - spreading the same loan amount over more years lowers the EMI, which can increase how much you're eligible for
- A higher credit score - some banks offer slightly better FOIR limits or rates for very strong credit profiles
- Fewer existing loans - paying off a car loan or personal loan before applying can meaningfully increase your eligible amount
Decreases it:
- Existing EMIs - car loans, personal loans, and even large ongoing credit card balances
- A shorter remaining working age - banks generally cap the loan tenure so it ends around retirement age, which reduces eligibility for older applicants
- Irregular or harder-to-verify income - as covered in our self-employed home loan guide, this can affect how confidently a bank calculates your eligible amount
- A lower credit score - some banks reduce the eligible FOIR percentage for weaker credit profiles, even if the rate itself doesn't change much
A Word of Caution: Eligible ā Comfortable
Just because a bank is willing to approve a certain loan amount doesn't mean that EMI is genuinely comfortable for your lifestyle. Banks calculate eligibility based on formulas - they don't know your other monthly expenses, savings goals, or how much cushion you want for emergencies.
A safer personal rule: aim for an EMI closer to 30-35% of your take-home income, even if the bank is willing to approve something higher. This leaves more breathing room for savings, unexpected expenses, and the other ownership costs we cover in our hidden costs of buying post.
Check What This Means for Buying vs Renting
Once you have a realistic sense of your borrowing power, the next useful step is comparing that EMI against what you're currently paying in rent - and how many years you'd need to stay for buying to make more financial sense.
š Use our Rent vs Buy Calculator to enter your realistic EMI and see a full comparison against renting.
This article is for general information only and is not financial advice. Loan eligibility criteria vary by bank and change over time - please confirm your actual eligibility directly with a lender.
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