Before you visit a bank, know what they’ll say. Every Indian bank uses a FOIR (Fixed Obligations to Income Ratio) cap to decide how much home loan you can get. For salaried applicants, SBI, HDFC, ICICI, and most other banks cap total EMI obligations at 40–55% of net monthly income. The calculator below uses the standard 50% FOIR to give you a conservative, reliable estimate.
How banks calculate home loan eligibility
The process has two steps:
Step 1 — Find your eligible EMI:
Eligible EMI = (Net Monthly Income × FOIR%) − Existing EMIs
Most banks use 40–55% FOIR for salaried employees. 50% is the most common cap and what large banks like SBI default to.
Step 2 — Back-calculate the loan amount from eligible EMI:
Loan Amount = Eligible EMI × [(1 − (1+r)^−n) / r]
Where r = monthly interest rate and n = tenure in months.
FOIR caps by bank (April 2026)
| Bank | FOIR cap (salaried) | Notes |
|---|---|---|
| SBI | 50–55% | Higher income = higher FOIR allowed |
| HDFC | 50% | Gross income basis for some products |
| ICICI Bank | 50–55% | Up to 60% for NRI applicants |
| Axis Bank | 50% | |
| Kotak Mahindra | 50% | |
| LIC Housing Finance | 50–55% | |
| Bajaj Housing Finance | 50–55% |
For self-employed applicants, most banks use a lower FOIR (40–45%) and also verify income differently (ITR, bank statements, business financials).
Current home loan interest rates (April 2026)
| Lender | Rate (salaried) | Notes |
|---|---|---|
| SBI (EBR-linked) | 8.50–9.00% | Lowest rates for 750+ CIBIL |
| HDFC Bank | 8.70–9.20% | |
| ICICI Bank | 8.75–9.30% | |
| Kotak Mahindra | 8.75–9.25% | |
| LIC Housing Finance | 8.50–8.90% | Good for government employees |
| Bajaj Housing Finance | 8.50–9.00% | |
| Bank of Baroda | 8.40–8.90% | PSU bank, competitive rates |
All home loans from 2016 onwards are linked to external benchmark (RBI repo rate). Current RBI repo: 6.00% (April 2026).
What else affects eligibility beyond FOIR?
CIBIL score: Below 700 and most banks will reject outright. 750+ gets you the best rates. Check your CIBIL for free once a year at cibil.com.
Age: The loan tenure cannot extend beyond your retirement age. If you’re 45 and want a 30-year tenure, banks will cap it at 15 years (to age 60), which raises your EMI significantly and reduces eligibility.
Loan-to-Value (LTV): Banks lend up to 75–90% of the property’s registered value, not the market price. A ₹80 lakh flat may get you ₹64–72 lakh as the loan; you need the rest as a down payment.
Co-applicant: Adding a working spouse as co-applicant lets the bank combine incomes for FOIR — one of the easiest ways to increase your eligible loan amount.
Worked example: ₹75,000 net income, ₹5,000 existing EMI, 8.75%, 20 years
| Metric | Value |
|---|---|
| Net monthly income | ₹75,000 |
| 50% FOIR cap | ₹37,500 |
| Existing EMIs | ₹5,000 |
| Eligible new EMI | ₹32,500 |
| Eligible loan amount | ~₹36.8 lakh |
To get ₹50 lakh at 8.75% for 20 years, you’d need a net income of approximately ₹93,000/month (with the same ₹5,000 existing EMI).
Frequently asked questions
Does the eligible amount include stamp duty and registration?
No. Banks lend only against the property’s market/registered value. Stamp duty (4–8% depending on state) and registration charges must be paid from your own pocket. Factor these in when planning your total budget.
How does my CIBIL score affect the interest rate?
Typically 25–75 bps difference between a 750 CIBIL and a 650 CIBIL borrower. On a ₹50 lakh, 20-year loan, a 0.5% difference in rate = roughly ₹1,800/month difference in EMI = ₹4.3 lakh extra over the full tenure. Clearing existing debt before applying is worth it.
Can I prepay my home loan?
Yes. Floating-rate home loans have no prepayment penalty for individuals (RBI regulation). Fixed-rate loans may have a 2% prepayment charge. Even 1–2 partial prepayments per year can cut your tenure by 5–7 years on a 20-year loan.
What documents do I need?
- KYC: Aadhaar, PAN, passport-size photo
- Income proof: last 3 months salary slips + 6 months bank statement (salaried); last 2 years ITR + P&L + balance sheet (self-employed)
- Property documents: sale agreement, title deed, approved building plan, encumbrance certificate
- Employment proof: offer letter, employment certificate
Sources
- RBI Master Direction on Housing Finance
- NHB (National Housing Bank) guidelines on LTV ratios
- HDFC, SBI, ICICI official eligibility and rate pages (April 2026)
- CIBIL score impact on lending rates — TransUnion annual report 2025