Home Loan Eligibility
The maximum loan amount a bank will sanction, determined by monthly income, existing obligations, credit score, property value, and loan-to-value ratio (typically 75–80% of agreement value).
What is Home Loan Eligibility?
Home loan eligibility is the maximum loan amount a bank or housing finance company will sanction to a borrower based on their financial profile. It is not simply a function of income — banks apply multiple filters to arrive at a loan amount that they assess can be repaid without default. Understanding eligibility helps you plan your property budget, identify whether a co-applicant would help, and choose the right lender.
Key Eligibility Factors
1. Income and FOIR (Fixed Obligation to Income Ratio): Banks assess your monthly income and deduct all existing EMIs (car loan, personal loan, other home loans) to arrive at the income available for new EMI repayment. Most banks cap new EMI at 40–50% of net monthly income. Higher-income applicants (above Rs 1 lakh/month) may get 50–55% FOIR.
2. Credit Score: A CIBIL or Experian score above 750 qualifies for the best rates. Scores between 700 and 749 may get loans but at 0.2–0.5% higher rate. Scores below 650 typically result in rejection. Check your score before applying.
3. Loan-to-Value (LTV) Ratio: Banks lend 75–80% of the property agreement value. For properties above Rs 75 lakh, LTV is capped at 75%. You must arrange the balance 20–25% as down payment (plus stamp duty and registration which banks do not fund).
4. Property Approval: The bank's technical team must approve the project. A bank approving a project is a positive signal of title and construction quality — most banks run their own technical due diligence before adding a project to their approved list.
Co-Applicant Benefits
Adding a co-applicant (spouse, parent, or adult child) pools both incomes for FOIR calculation, increasing the eligible loan amount. Most banks require co-applicants to be co-owners of the property. A co-applicant with a strong CIBIL score can also improve approval chances if the primary applicant score is marginal.
Practical Eligibility Estimate
Rule of thumb: at 9% interest for 20-year tenure, every Rs 1 lakh of net monthly income supports roughly Rs 7–8 lakh of home loan. A household with Rs 1.5 lakh combined monthly income might be eligible for a loan of Rs 1–1.1 crore. This varies with rate, tenure, and existing obligations.
How Brickplot Uses Home Loan Data
Brickplot tracks which banks have approved specific projects for home loans. Projects approved by 3 or more nationalised or tier-1 private banks signal good title and construction quality. This is factored into the Governance axis of the Brickplot Score.
Related Terms
- EMI Calculation — how monthly repayment is derived from loan amount
- Section 80C Home Loan Tax Benefit — tax deductions available on home loan
- Tripartite Agreement — the bank-builder-buyer agreement for under-construction loans
Related terms
Brickplot verifies home loan eligibility disclosures on every reviewed project as part of the independent 11-axis score. No builder commissions. No editorial override.