How Lenders Actually Calculate Your Home Loan Eligibility (FOIR)

The single most important formula in home loan eligibility is FOIR - Fixed Obligation to Income Ratio. Banks cap your total monthly EMI obligations (existing + new home loan EMI) at 50–55% of gross monthly income.

The Core Formula

Maximum home loan EMI = (Gross monthly income × FOIR cap) − Existing EMIs

For a salary of ₹1 lakh with no existing EMIs:

• Available EMI capacity: ₹50,000–₹55,000
• At 8.5% over 20 years: that EMI supports about ₹58–63 lakh sanction

Salary-to-Sanction Reference Table

Indicative, assuming 8.5% rate, 20-year tenure, no existing EMIs, CIBIL 750+:

Subject to lender approval, employer category, and credit profile.

Five Ways to Boost Your Eligibility

• Add a co-applicant - spouse's income adds directly to FOIR pool
• Pay off small loans - closing a ₹3K credit card EMI frees up ₹3.6 lakh of sanction
• Pick a longer tenure - 25 years vs 15 years can add 30% to sanction (but increases total interest)
• Apply at a bank where your employer is Category-A - TCS, Infosys, HDFC etc. get higher FOIR caps
• Improve CIBIL score - 750+ unlocks the best FOIR caps

What FOIR Doesn't Tell You

• LTV cap also matters: even if FOIR allows ₹1 Cr sanction, on a ₹75L+ property you're capped at 75% LTV per current norms
• Property valuation must support the sanction - banks won't lend more than market value
• Some lenders use NIIIR (Net Income to Installment Ratio) instead of FOIR - stricter

Our advisor runs the full eligibility math for your exact profile across 6–8 banks before you apply, so you know the realistic sanction range upfront.