Banks use a key metric called FOIR (Fixed Obligation to Income Ratio) to determine how much loan you can afford. Most banks cap this at 50–60% of your net monthly income. This means if you earn ₹50,000 per month, your total EMI obligations should not exceed ₹25,000–₹30,000.
Other factors that influence eligibility include:
- Credit score: A CIBIL score of 750+ is ideal. Below 700, most banks will either reject or offer higher rates.
- Existing EMIs: Any car loan, personal loan, or credit card EMI reduces your eligible home loan amount.
- Employment type: Salaried employees at reputed companies get better terms than self-employed individuals.
- Age: Younger applicants get longer tenures (up to 30 years), which increases eligible loan amount.