How banks decide eligibility
Lenders cap your total EMIs at a fixed share of net monthly income, called FOIR (fixed obligation to income ratio), usually 40–55% depending on salary level. The room left after existing EMIs becomes your maximum new EMI, and the loan amount is whatever that EMI supports at the quoted rate and tenure. A ₹1 lakh net income with no other EMIs at 50% FOIR supports about ₹57 lakh over 20 years at 8.5%.
How to increase eligibility
Adding a co-applicant's income, choosing a longer tenure, closing small loans and credit card EMIs, or improving your credit score to get a lower rate all raise the amount. Banks also check age, so tenure is usually limited to retirement at 60.
Frequently asked questions
What FOIR do banks use?
Typically 50% for salaried applicants, up to 55–60% for high incomes and 40% for lower incomes or self-employed.
Is eligibility based on gross or net salary?
Net take-home in most cases, after tax and PF.
Does property value matter?
Yes. Banks also cap the loan at 75–90% of the property value, whichever limit is lower applies.