Home Loan Affordability
The EMI a lender's income test leaves room for, the loan it repays, and the home price with your down payment.
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An EMI of ₹50,000 repays a loan of about ₹57,61,542; with 20% down that is a home of about ₹72,01,927.
- Loan the EMI repays₹57,61,542
- EMI room a month₹50,000
- Down payment needed₹14,40,385
- Interest over the tenure₹62,38,458
How this is worked out
- EMI room = income × the share lenders allow − EMIs you already pay.
- Loan = EMI room × (1 − (1 + i)^−n) ÷ i, with i the monthly rate and n the months.
- Home price = loan ÷ (1 − down payment share).
Assumptions
- Lenders in India commonly allow all EMIs together up to about half of take-home pay; each lender sets its own rule, and your credit report matters too.
- Stamp duty, registration and interiors come on top of the down payment.
The formula
EMI room = income × FOIR − existing EMIs
Loan = EMI × (1 − (1 + i)^−n) ÷ i
Home price = loan ÷ (1 − down payment share)
- FOIR: fixed obligations to income ratio: the share of income a lender lets all your EMIs take
- i: the monthly interest rate
- n: the number of months
Stamp duty, registration and interiors are paid on top of the down payment.
A worked example
With ₹1,00,000 a month and no other EMIs, a 50% limit leaves ₹50,000 for an EMI. At 8.5% for 20 years that repays about ₹57,61,542.
Questions people ask
How much home loan can I get on my salary?
Lenders look at how much of your take-home pay your EMIs would take, commonly up to about half, and at your credit report. This calculator turns that share into a loan amount at the rate and tenure you choose. Each lender applies its own rules.
What is FOIR?
Fixed obligations to income ratio: all your monthly EMIs, including the new home loan, as a share of monthly income. A lower ratio leaves more room for savings and for surprises.
How much down payment do I need?
Banks usually lend up to 75 to 90% of the property value depending on the loan size, so expect to pay 10 to 25% yourself, plus stamp duty and registration, which banks do not finance.
From the Savingy Guide
Related calculators
- Loan EMI Calculator: Calculate your loan EMI, total interest and total repayment for home, car or personal loans. Free EMI calculator with instant results.
- Rent vs Buy Calculator: Rent or buy a home in India: EMI, stamp duty, upkeep, rent rises and returns on the difference, with what each owns after the years you choose.
- Prepay or Invest Calculator: A spare amount each month, paid off your loan or invested: interest saved, months saved, and which ends ahead when the loan would have ended.
Sources
Estimates are for illustration only and assume constant returns. Actual returns vary with market conditions. This is not investment advice.