Income & Loan Details
Eligibility Result
How Home Loan Eligibility is Calculated in India
A home loan eligibility calculator helps you estimate how much home loan you can get from banks or housing finance companies in India. Lenders calculate eligibility mainly based on your income, existing loans, interest rate, and loan tenure.
What is FOIR (Fixed Obligation to Income Ratio)?
Most banks in India use the FOIR method to determine home loan eligibility. FOIR is the percentage of your monthly income that can safely be used to pay EMIs.
- Typically, 40% to 60% of your monthly income can be used for total EMIs
- Existing EMIs (personal loan, car loan, credit card EMI) are deducted first
- The remaining amount becomes your eligible home loan EMI
How Banks Calculate Home Loan Amount
Once your eligible EMI is calculated, banks use the interest rate and loan tenure to arrive at the maximum home loan amount you qualify for.
Home Loan Eligibility Formula (Reverse EMI):
Home Loan Amount = EMI × [ (1 + r)^n – 1 ] / [ r × (1 + r)^n ]
where r is the monthly interest rate and n is the total number of monthly EMIs.
Factors That Affect Home Loan Eligibility
- Monthly salary or business income
- Age of the applicant (affects loan tenure)
- Existing EMIs and liabilities
- Interest rate offered by the bank
- Loan tenure (up to 30 years in India)
- Credit score (preferably 750+)
How to Increase Your Home Loan Eligibility
- Repay or close existing loans to reduce EMIs
- Add a working spouse or family member as co-applicant
- Choose a longer loan tenure to lower EMI
- Maintain a good credit score and stable income