What is Home Loan Eligibility?
Home loan eligibility is the maximum loan a bank will lend you. Indian banks primarily use the FOIR (Fixed Obligation to Income Ratio) method: they cap all your monthly EMIs at around 50–60% of your net income. The remaining capacity is converted into a loan amount at the offered rate and tenure.
Formula
Banks use the FOIR method to size the loan:
Available for EMI = (income × FOIR%) − existing EMIs Eligible amount = available EMI × [(1 + r)^n − 1] / [r × (1 + r)^n] r = monthly rate, n = tenure in months FOIR = typically 50–60%
How to use this calculator
Enter your net monthly income, any existing EMIs, the interest rate, tenure and FOIR (50–55% is typical). The calculator estimates the maximum home loan you could qualify for. Actual eligibility also depends on credit score, age and property value.