Home Affordability Calculator
Key Takeaway
Banks typically limit your total EMIs to 40% of gross monthly income (FOIR). With a ₹1.5 lakh salary and no existing EMIs, the maximum affordable home price is approximately ₹89 lakh including a ₹20 lakh downpayment.
Home Affordability Calculator
Estimate how much you can spend on a house based on income, monthly obligations, and downpayment.
Affordability Summary
What to do next
Based on your Home Affordability Calculator, here are the tools you should try next:
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The Math of Not Going Broke on a House
Just because a bank is willing to lend you ₹1 Crore doesn't mean you can actually afford a ₹1 Crore house. Home affordability uses a Fixed Obligation to Income Ratio (FOIR), ensuring your total monthly debt payments never exceed 40-50% of your take-home pay, preventing you from becoming 'house poor'.
The 'House Poor' Trap: Sanjay's Dream Home
The bank pre-approves him for a ₹95 Lakh loan at 8.5% for 20 years. The EMI is ₹82,400.
Sanjay thinks, "I make ₹1.5L, I can afford ₹82k."
He buys the house.
Six months later, Sanjay is miserable.
- Take-home: ₹1,50,000
- Home EMI: -₹82,400
- Car EMI: -₹15,000
- Maintenance & Utilities: -₹10,000
- Groceries: -₹20,000
He has barely ₹20,000 left for investments, healthcare, and leisure. His FOIR is a dangerous 65%. A single medical emergency will force him into credit card debt. If Sanjay had calculated his true affordability, capping his housing EMI at 30% of his income (₹45,000), he would have bought a comfortable ₹60 Lakh house and lived a stress-free, financially abundant life.
Frequently Asked Questions
How much home loan can I afford?
A general rule of thumb is the 20/4/10 rule: put down at least 20%, take a loan for no more than 4 years (or manage EMI similarly), and keep total housing costs under 30% of your gross monthly income.
Do banks consider gross or net income for home loans?
Banks generally consider your net (take-home) monthly income. They calculate your Fixed Obligation to Income Ratio (FOIR), preferring that all your EMIs combined do not exceed 40-50% of your take-home pay.
What is FOIR?
Fixed Obligation to Income Ratio (FOIR) is a metric used by lenders to determine your loan eligibility. It is the percentage of your monthly income that goes toward paying current debt obligations (EMIs, credit card dues).
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