How Much Home Loan Can You Actually Afford?
"How much can I borrow" isn't a formula everyone agrees on. It's a lender-specific underwriting call, and understanding the actual mechanism gets you a far better answer than any generic online calculator.
Search "how much home loan can I get on my salary" and you'll find a dozen calculators, each with a slightly different multiplier, and none of them explain where the number actually comes from. The real answer isn't a universal formula. It's a specific ratio a lender runs against your income, called FOIR, and it isn't even the same number from bank to bank.
What is FOIR, and why isn't it a rule the way LTV is?
FOIR stands for Fixed Obligation to Income Ratio: the share of your net monthly income that's already committed to EMIs and other fixed debt, including the new home loan you're applying for. It's worth being precise about what FOIR is not: unlike LTV, which RBI caps on an actual mandated sliding scale (see the down payment guide), FOIR has no single regulatory ceiling. It's underwriting policy, and every lender sets its own.
What can be verified and what can't: commonly cited FOIR bands across lenders run roughly 40-50% of net monthly income for salaried borrowers, tightening toward 40% at lower income levels and loosening toward 55-65% for higher earners at some lenders, self-employed applicants are often held to a slightly tighter band than salaried ones. These figures come from lender-published eligibility pages and aggregator content, not a single RBI circular, and they change by lender, by your existing obligations, and by policy revisions banks don't always publicize. Treat the numbers in this guide as a realistic planning range, not a rule your specific lender is bound to.
How do you work backwards from a real EMI, not a hypothetical one?
Instead of a generic "3-5x your annual salary" rule of thumb, it's more honest to work backwards from an actual EMI. Take the site's own base case: a ₹1,00,00,000 loan at 7.5% over 20 years, EMI ₹80,559 (computed the same reducing-balance formula as everywhere else on this site, not a separate estimate).
| FOIR band | Net monthly income needed |
|---|---|
| 40% | ₹2,01,398 |
| 45% | ₹1,79,021 |
| 50% | ₹1,61,119 |
| 55% | ₹1,46,471 |
That's the income a lender would want to see, with no other EMIs already running, before that ₹80,559 figure comfortably fits inside their own risk band. A ₹1.6-2 lakh monthly income for a ₹1 crore loan isn't an arbitrary number, it falls out directly from running the FOIR math against the site's own EMI calculation.
Loan size scales the same way. At the same 7.5%, 20-year terms:
| Loan amount | EMI |
|---|---|
| ₹50,00,000 | ₹40,280 |
| ₹75,00,000 | ₹60,419 |
| ₹1,00,00,000 | ₹80,559 |
| ₹1,25,00,000 | ₹1,00,699 |
| ₹1,50,00,000 | ₹1,20,839 |
Because EMI scales almost exactly linearly with principal at a fixed rate and tenure (this is arithmetic, not a coincidence: the reducing-balance formula is linear in P), the income-needed table above scales the same way for any of these. A ₹50 lakh loan at a 50% FOIR needs roughly ₹80,000 in net monthly income; a ₹1.5 crore loan needs roughly ₹2.4 lakh.
What other levers decide the real number?
FOIR is the main mechanism, but three other things move the actual sanctioned amount:
- Existing EMIs. FOIR is calculated against all fixed obligations, not just the home loan you're applying for. A car loan or personal loan EMI already running eats directly into the room left for a home loan.
- Tenure. A longer tenure lowers the EMI for the same loan amount (see the EMI guide for why), which is often the actual lever that makes a larger loan fit inside a fixed FOIR band, not a bigger income.
- CIBIL score and LTV. A weak credit score can tighten a lender's FOIR band or the rate offered, and even with income to spare, LTV rules cap how much of the property price can be borrowed at all, covered in the down payment guide.
This calculator itself doesn't check any of this. It never asks for your income, never computes a FOIR, and doesn't model loan eligibility at all, the same limitation already disclosed on the homepage. Everything above is the underwriting math happening on your lender's side, separate from what this site simulates once you already know your numbers.
What does this mean practically?
Affordability isn't "how much will a bank lend me," it's "what EMI fits inside my own real budget, independent of what a bank is willing to approve." A lender's FOIR ceiling is a risk limit for them, not a comfort limit for you, and the two numbers are frequently different. Before assuming a sanctioned amount is the right amount to borrow, run the EMI through your own monthly numbers, not just theirs.
See exactly how a given loan amount plays out
The PlanMyLoans calculator shows EMI, total interest, and payoff time live, for any loan amount, rate, and tenure you enter.
Model this with your own numbers →Related guides
Why a bigger down payment is closer to a guaranteed return than people realise, and where the line is between "smart" and "leaving money on the table."
The amortisation formula behind every EMI, why your interest payment is huge in year one and tiny in year twenty, and how to sanity-check any number a bank gives you.