What is FOIR and why does it decide my eligibility?

The Fixed Obligation to Income Ratio is the share of your net monthly income a lender will allow all your EMIs to consume. It is typically 50%, dropping to 40% or lower for modest incomes and rising to 60–65% for high earners. Lenders work backwards from it: your affordable EMI sets the loan, not the other way round.

Why does the property value exceed the loan amount?

Because RBI caps how much of a property price can be financed. The loan-to-value ceiling is 90% for loans up to ₹30 lakh, 80% up to ₹75 lakh and 75% above that. The remainder is your down payment, and it must come from your own funds — you cannot borrow it separately, since that new EMI would reduce your eligibility.

Does a co-applicant increase eligibility?

Substantially, because incomes are combined while the FOIR percentage stays the same. Adding a spouse earning ₹60,000 to your ₹1,00,000 raises the eligible EMI from ₹50,000 to ₹80,000 at 50% FOIR. Both become jointly liable, and both can claim the tax deductions in proportion to their share.

What else affects the decision beyond income?

Credit score above all — most lenders want 750 or higher, and a weak score means rejection or a materially worse rate regardless of income. Age matters because the tenure must usually end by retirement. Employment stability, the employer category, and the legal and technical clearance of the property itself all feed in.

How do I improve my eligibility?

Close small personal loans and credit card EMIs first — each one directly reduces the EMI you can afford. Beyond that: add an earning co-applicant, choose a longer tenure if your age allows, improve your credit score over a few months, and declare all income sources including rent and bonuses with documentation.

Home Loan Eligibility Calculator

How to use this calculator

Enter your net monthly income — what reaches your account, not CTC.
Enter any existing EMIs: car, personal, credit card instalments.
Enter the rate and tenure you expect.
Adjust the FOIR if you know what your lender allows. 50% is typical.

How lenders actually decide

Not from the property price. They work backwards from your income.

Step 1 — FOIR. The Fixed Obligation to Income Ratio is the share of net monthly income the lender will let all your EMIs consume:

affordable EMI = (income × FOIR) − existing EMIs

Step 2 — convert that EMI into a loan. The annuity formula rearranged for principal:

loan = EMI × [1 − (1+i)^−n] / i

Step 3 — apply the LTV cap. RBI limits how much of a property’s price can be financed:

Loan amount	Maximum LTV
Up to ₹30 lakh	90%
₹30–75 lakh	80%
Above ₹75 lakh	75%

A worked example

Net income ₹1,00,000 a month, no existing EMIs, at 8.5% over 20 years, with a 50% FOIR.

affordable EMI = 1,00,000 × 0.50 − 0 = 50,000
loan = 50,000 × [1 − (1.00708)^−240] / 0.00708 = 57,61,542

At ₹57.6 lakh the LTV cap is 80%, so:


Loan you can get	₹57,61,542
Affordable EMI	₹50,000
Property you can buy	₹72,01,927
Down payment needed	₹14,40,385

The down payment is the part people underestimate. Nearly ₹14.4 lakh in cash is needed before the loan does anything — and that is before stamp duty, registration and brokerage, which typically add another 7 to 10% of the property value.

Existing EMIs cost you rupee for rupee

Every existing instalment reduces your eligible EMI by exactly that amount, and then that reduction is multiplied by the loan factor.

A ₹15,000 car EMI cuts your affordable EMI from ₹50,000 to ₹35,000, which cuts the eligible loan from ₹57.6 lakh to about ₹40.3 lakh. A ₹15,000 EMI costs you ₹17 lakh of home loan.

Closing small personal loans and card EMIs before applying is usually the highest-value thing you can do.

A co-applicant is the biggest lever

Incomes combine while the FOIR percentage stays the same. Adding a spouse earning ₹60,000 raises household income to ₹1,60,000, so the affordable EMI goes from ₹50,000 to ₹80,000 — and the eligible loan from ₹57.6 lakh to roughly ₹92.2 lakh.

Both become jointly liable, and both can claim the tax deductions in proportion to their ownership share and their contribution to repayment.

What else the lender looks at

Credit score, above all. Most lenders want 750 or higher. A weak score means rejection or a materially worse rate regardless of income, and no calculator can model it.

Age and tenure. The loan must usually finish by retirement, around 60. At 45 you may be offered 15 years rather than 20, which reduces eligibility significantly.

Employment stability. Salaried applicants with two or more years at a listed or large employer get the best terms. Self-employed applicants are assessed on two to three years of ITRs and generally get a lower FOIR.

The property itself. Legal and technical clearance can reduce or block a loan even when your finances are fine — unapproved layouts, disputed titles and under-construction projects without approvals are common causes.

Should you borrow the maximum?

Rarely.

Eligibility is what a lender will risk, not what you can comfortably live with. An EMI at 50% of net income leaves very little room for a job change, a medical event, or the maintenance, property tax and society charges that come with ownership.

Many people find 30 to 35% of net income is the level they can actually sustain without the loan dominating every other decision. On ₹1,00,000 income that is a ₹30,000–35,000 EMI, or a loan around ₹35–40 lakh rather than ₹57.6 lakh.

The calculator tells you the ceiling. Where you sit below it is the more important decision.

Common mistakes to avoid

Using CTC instead of net income. CTC includes employer PF and the gratuity provision, neither of which reaches you. Lenders assess net take-home.

Forgetting stamp duty and registration. Typically 5 to 8% of property value depending on the state, payable in cash on top of the down payment.

Assuming pre-approval is a guarantee. A pre-approved amount is based on your finances alone. The final sanction still depends on the property clearing legal and technical checks.

Applying to several lenders at once. Each application triggers a hard credit enquiry, and a cluster of them lowers your score at exactly the wrong moment.

When this calculator is not the right tool

Once you know the loan amount, use the EMI calculator to see the monthly payment, the total interest and what prepayment would save. For the take-home figure to enter here, use the take-home salary calculator. And for a property purchase outside India, the mortgage calculator models escrow-based payments instead.