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
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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.
The EMI Trap: Why the Bank's Loan Limit is NOT Your Budget
When Anjali and Rahul walked into the bank, they were thrilled to learn they were "eligible" for a ₹1.2 Crore home loan based on their combined salaries. The bank manager assured them the EMI would comfortably fit within 50% of their net income. So, they stretched their budget and bought the premium apartment.
Three years later, they felt suffocated. While they could technically pay the EMI, they hadn't accounted for the rising maintenance fees, higher property taxes, and the cost of furnishing a much larger home. They were forced to pause their SIPs and cut down on vacations entirely. They were "house poor."
Banks calculate your loan eligibility based on what maximizes their profit while keeping default risk low. They do not care about your retirement goals, your children's education, or your lifestyle expenses.
A true home affordability calculation doesn't just look at your gross salary. It subtracts your existing debt, factors in a buffer for interest rate hikes, and ensures your EMI stays comfortably under 30% of your take-home pay. Never let a lender tell you how much house you can afford. Run the numbers yourself and protect your future cash flow.
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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