Reverse-solve max property price
Default scenario: ₹2 lakh/month take-home, ₹15K existing EMIs, ₹25 lakh down payment.
The Indian bank affordability formula
Step 1 — Maximum allowable EMI = 0.5 × take-home income − existing EMIs. Indian banks (SBI, HDFC, ICICI, Axis) all use a 50% FOIR (fixed-obligations-to-income ratio) ceiling for salaried borrowers with CIBIL 750+. For lower incomes (₹40K–60K) the cap is 40%.
Step 2 — reverse-solve the EMI formula for principal: L = EMI × ((1+r)n − 1) / (r × (1+r)n). This gives the maximum loan amount a bank will sanction given your allowable EMI, the current rate, and desired tenure.
Step 3 — Maximum property price = maximum loan + your down payment. Indian banks fund up to 80% LTV for most properties (75% if value exceeds ₹75 lakh, 90% for affordable housing under ₹30 lakh). Add 7–11% on top for stamp duty + registration + brokerage — this comes from your pocket, not the loan.
Affordability at different income levels
| Take-home / month | Existing EMI | Down payment | Max EMI | Max loan (8.5%/20y) | Max property |
|---|---|---|---|---|---|
| ₹1,00,000 | ₹5,000 | ₹10,00,000 | ₹45,000 | ₹51.85 L | ₹61.85 L |
| ₹2,00,000 | ₹15,000 | ₹25,00,000 | ₹85,000 | ₹97.94 L | ₹1.23 Cr |
| ₹3,50,000 | ₹20,000 | ₹50,00,000 | ₹1,55,000 | ₹1.79 Cr | ₹2.29 Cr |
| ₹5,00,000 | ₹30,000 | ₹1,00,00,000 | ₹2,20,000 | ₹2.54 Cr | ₹3.54 Cr |
Frequently asked
What FOIR do Indian banks actually use?
For salaried borrowers with stable employment and CIBIL 750+, nationalised and private banks use 50% FOIR (Fixed Obligations to Income Ratio). For borrowers with lower credit scores, lower income, or self-employed status, FOIR drops to 40–45%. Some HFCs (housing finance companies) go up to 55–65% for high-income applicants, but total EMI-to-income above 50% is financially risky regardless of what the bank allows.
Should I take the maximum loan the bank offers?
Usually not. Banks optimise for their approval rate; you should optimise for your life. A rule of thumb: housing-only EMI should stay under 40% of take-home, not 50%. That leaves room for maintenance, property tax, insurance, medical emergencies, and retirement savings. A ₹1 lakh/month EMI leaves very little for a ₹2 lakh/month family.
What is LTV and how much can I borrow?
Loan-to-Value is the maximum percentage of property value the bank will fund. Current RBI guidelines: up to 90% for properties under ₹30 lakh (affordable housing), 80% for ₹30–75 lakh, 75% for above ₹75 lakh. The rest is your down payment. Stamp duty + registration (7–11% on top) must always come from your own funds — banks don’t fund it.
Does this account for GST and stamp duty?
The calculator shows an indicative stamp duty buffer of about 7%. In reality, the full upfront out-of-pocket cost on top of down payment is: stamp duty 4–7% + registration 0.5–2% + GST (only for under-construction, 5% without ITC or 1% for affordable) + brokerage 1–2% + legal and valuation fees. Budget 10–13% above the headline price.
My CIBIL is 680 — will I get a home loan?
Yes, but at a penalty rate. CIBIL 750+ borrowers in 2026 get 8.1–8.6%; 680–749 pay 8.8–9.5%; below 680 either get rejected or pay 10%+. Work on CIBIL for 6 months before applying: pay existing EMIs on time, reduce credit-card utilisation under 30%, and avoid new credit applications. A 50-point score improvement is worth ₹5–10 lakh in interest over a 20-year loan.