How Much Home Loan You Can Get on Your Salary
Two people earning the same salary walk into the same bank and walk out with sanction letters Rs 20 lakh apart. Nothing about that is arbitrary. Lenders run two separate tests, take the lower answer, and adjust for a handful of things you can actually change before you apply.
This is how the number is built, what a given salary supports at today's rates, and the four levers that move it.
Key takeaways
- Your loan is the lower of two limits — what your income can service, and what the property's value allows.
- Income test: lenders cap total EMIs at roughly 40% to 60% of net monthly income, rising with salary.
- Property test: 90% funding under Rs 30 lakh, 80% between Rs 30 and 75 lakh, 75% above Rs 75 lakh.
- Stamp duty and registration are not funded. Budget 7% to 9% of the property value from your own pocket, on top of the down payment.
- A net salary of Rs 1 lakh supports about Rs 62 lakh of loan at 7.5% over 20 years, before any existing EMIs are deducted.
Test one: what your income can service
The ratio lenders use is FOIR — fixed obligation to income. Add every monthly commitment you already have (car loan, personal loan, the minimum on a credit card, an existing home loan) plus the EMI you are asking for, and divide by net monthly income. Most lenders want that under 50% for a salaried applicant, and closer to 45% for the self-employed.
The cap is not one number. In practice it slides with income, because someone earning Rs 3 lakh a month can hand over 60% of it and still eat.
| Net monthly income | FOIR usually allowed | EMI available | Loan at 7.5%, 20 years |
|---|---|---|---|
| Rs 50,000 | 45% | Rs 22,500 | About Rs 27.9 lakh |
| Rs 75,000 | 50% | Rs 37,500 | About Rs 46.5 lakh |
| Rs 1,00,000 | 50% | Rs 50,000 | About Rs 62.1 lakh |
| Rs 1,50,000 | 55% | Rs 82,500 | About Rs 1.02 crore |
| Rs 2,00,000 | 55% | Rs 1,10,000 | About Rs 1.37 crore |
| Rs 3,00,000 | 60% | Rs 1,80,000 | About Rs 2.23 crore |
Every rupee of existing EMI comes straight off that figure. A Rs 12,000 car loan on a Rs 1 lakh salary costs you roughly Rs 15 lakh of home loan eligibility, which is usually a worse trade than the car was.
Some banks also apply a blunter check alongside FOIR: a multiple of 48 to 60 times net monthly salary. On a Rs 1 lakh salary that is Rs 48 lakh to Rs 60 lakh, and whichever method gives the smaller number is the one you get.
Test two: what the property allows
The RBI's loan-to-value caps decide the rest, and no amount of income moves them.
| Property value | Maximum funding | Your minimum contribution |
|---|---|---|
| Up to Rs 30 lakh | 90% | 10% |
| Rs 30 lakh to Rs 75 lakh | 80% | 20% |
| Above Rs 75 lakh | 75% | 25% |
Two things trip people up here. The bank applies the cap to its own valuation of the property, which can land below the price you agreed — the shortfall is yours to fund. And stamp duty, registration and brokerage sit outside the loan entirely. On a Rs 80 lakh flat in Delhi NCR that is 25% down, roughly Rs 20 lakh, plus about Rs 6 lakh of duty and registration, before furniture.
What moves your number, and by how much
- Credit score. Most lenders price in bands. Above 800 you see the advertised floor; in the 730 to 770 range you pay 15 to 50 basis points more; below 700 the file gets conditions or a rejection. Six months of clean repayment before you apply is worth real money.
- Tenure and your age. Banks want the loan closed by 60 to 65. A 45-year-old applicant is often capped at 15 to 20 years, which cuts eligibility by a fifth against a 30-year-old on the same salary.
- How your salary is built. Fixed pay counts fully. Variable pay, incentives and bonuses are typically averaged over two years and counted at half. Reimbursements usually do not count at all.
- Job stability. Two years of total work experience and six months to a year in the current job is the standard bar. A recent switch inside the same industry is fine; a gap is not.
- Existing obligations. Close small personal loans and consumer-durable EMIs before applying. A card balance you revolve counts as an obligation even when you intend to clear it.
Tenure: the lever with a price tag
Stretching the tenure raises the loan you qualify for, and quietly raises what it costs. Same EMI of Rs 40,000 at 7.5%:
| Tenure | Loan supported | Total interest paid |
|---|---|---|
| 10 years | Rs 33.7 lakh | Rs 14.3 lakh |
| 15 years | Rs 43.1 lakh | Rs 28.9 lakh |
| 20 years | Rs 49.7 lakh | Rs 46.3 lakh |
| 25 years | Rs 54.2 lakh | Rs 65.8 lakh |
| 30 years | Rs 57.2 lakh | Rs 86.8 lakh |
Going from 20 years to 30 buys you Rs 7.5 lakh more house and costs Rs 40 lakh more in interest. Take the long tenure if it is the only way to buy the right home, then prepay when your income rises — there is no penalty on a floating-rate loan.
Four ways to raise eligibility, ranked
- Add an earning co-applicant. A working spouse or parent pools income into the same FOIR calculation. Both incomes count, both credit scores are checked, and if the co-applicant is also a co-owner, each of you can claim the interest deduction separately.
- Clear the small loans. Paying off a Rs 3 lakh personal loan with a Rs 9,000 EMI releases about Rs 11 lakh of home loan headroom.
- Declare rental income. If you already own a let-out property, lenders will count a portion of the documented rent — usually 60% to 75% — as income.
- Use the subsidy if you qualify. A first-home buyer with household income up to Rs 9 lakh can claim the interest subsidy under PMAY-U 2.0, worth up to Rs 1.8 lakh, on a loan up to Rs 25 lakh for a home valued up to Rs 35 lakh. Our comparison of EWS, affordable, DDJAY and PMAY shows how it stacks on top of the other schemes.
The number nobody prints on a sanction letter
Eligibility is what a lender will give you. Affordability is what you should take. A 50% FOIR looks manageable in a spreadsheet and feels very different in a year when school fees rise, a car needs replacing and a bonus does not arrive. As a sanity check, keep the home loan EMI under about 35% of net income, and hold six months of EMIs in cash before you sign. If those two conditions fail, you are borrowing your emergency fund.
FAQ
How much home loan can I get on a Rs 60,000 salary?
Roughly Rs 33 lakh to Rs 37 lakh at 7.5% over 20 years, assuming no existing EMIs and a clean credit record. That supports a property of about Rs 41 lakh to Rs 46 lakh once you add the 20% down payment.
Does the bank use my gross salary or net?
Net take-home, after statutory deductions. Some lenders add back the employer's provident fund contribution; most do not.
Can I include my spouse's income?
Yes, as a co-applicant. Both incomes count towards FOIR, both credit histories are assessed, and both are liable for the loan.
What credit score do I need for a home loan?
750 and above gets you the advertised pricing at most lenders. Between 700 and 750 you will usually get approved at a higher rate. Below 700, expect a co-applicant requirement, a lower LTV or a decline.
Is stamp duty covered by the loan?
No. Stamp duty and registration must be funded by you, on top of the down payment — 7% to 9% of the property value in most states. Only very small loans have historically been allowed to include it.
Next steps
Work out the down payment first, since that is what usually decides the ceiling — our guide to how much you actually need upfront has the state-wise costs. If you already hold a loan, check whether your rate has drifted above the market before you borrow more: the balance transfer maths is worth ten minutes. And when you know your EMI comfort level, send it to us and we will show you what it buys in the corridors you are considering.
