Home Loan Eligibility and Affordability Guide

Home-loan eligibility decides how much a bank will lend you; affordability decides how much you *should* borrow. Getting both right protects you from overstretching for 20–30 years.

📌Key takeaways

• Banks usually lend up to 75–90% of the property value (loan-to-value), depending on loan size.
• EMI capacity is typically capped at 40–60% of net income across all loans.
• You need to fund the down payment plus stamp duty, registration and other costs yourself.
• A good credit score, co-applicant and longer tenure increase eligibility.

💸Loan-to-value (LTV) caps

Stamp duty and registration are usually not financed as part of the property value.

🙋Estimating your eligibility

Net income ₹1,20,000/month, existing EMIs ₹10,000, allowed FOIR 50%:

• EMI capacity = ₹60,000 − ₹10,000 = ₹50,000
• At 8.5% for 20 years, ₹50,000 EMI supports about ₹57.6 lakh.

💰Upfront costs to budget

📜Affordability rules of thumb

• Keep total EMIs within ~40% of take-home pay.
• Keep 6 months of expenses + EMIs as an emergency fund after buying.
• Property price ideally within ~5–6× annual household income.
• Buy term insurance to cover the loan.

🙋Improving eligibility

• Add an earning co-applicant (spouse, parent).
• Close personal loans or card debt first.
• Choose a longer tenure (then prepay).
• Improve your credit score before applying.

Use our home loan guide and EMI calculator.

✅Your action checklist

1. Check your credit report and fix errors at least a month before applying.
2. Get the Key Fact Statement (KFS) with APR from at least two lenders.
3. Keep total EMIs within about 40–50% of take-home pay.
4. Read prepayment, foreclosure and penal-charge clauses before signing.
5. Save the sanction letter, KFS and repayment schedule; collect the no-dues certificate when you close.

❓FAQs