House/Loan Affordability Calculator

How House/Loan Affordability Calculator Works

Lenders don't approve a home loan based on how much you want to borrow -- they work backward from how much of your income can safely go toward EMIs, given what you're already paying on other debts. This calculator uses that same bank logic to show your realistic borrowing power, not just a number based on the home price alone.

Formula & Method

Your maximum affordable EMI is Monthly Income × (FOIR% ÷ 100) − Existing EMIs -- FOIR (Fixed Obligation to Income Ratio) is the standard metric lenders use to cap total debt payments as a share of income. That affordable EMI is then run through the reverse of the standard EMI formula to solve for the maximum loan principal it can support at your chosen rate and tenure, and the down payment is added on top for the maximum affordable property price. A second pass repeats the same math at your loan rate plus a stress-test buffer, showing what you could still afford if rates rose before or during your loan.

Worked Example

With ₹1,00,000 monthly income, ₹10,000 in existing EMIs, a 50% FOIR cap, ₹10,00,000 down payment, 8.5% loan rate, and a 20-year tenure: the affordable EMI is ₹40,000 (50% of income, minus existing obligations), which supports a maximum loan of about ₹46.09 lakh -- a maximum affordable property price of about ₹56.09 lakh. Stress-tested at 10.5% (the default 2% buffer), that drops to about ₹40.06 lakh loan / ₹50.06 lakh property.

Frequently Asked Questions

What is FOIR, and why does 40-50% show up so often?

FOIR (Fixed Obligation to Income Ratio) is the percentage of your net income lenders will allow to go toward all fixed debt obligations combined -- EMIs, credit card minimums, and the new loan itself. Most Indian lenders cap this at 40-50% for salaried applicants (sometimes higher for high earners), balancing loan access against leaving enough income for living expenses.

Why does the calculator subtract existing EMIs before calculating what I can afford?

FOIR caps total debt obligations, not just the new loan -- if you're already paying toward a car loan or personal loan, that eats into the same percentage-of-income budget, leaving less room for a new home loan EMI. This is exactly how a bank's underwriting would treat your application.

What does the "stress-test" figure actually protect me from?

It answers "could I still afford this loan if rates go up?" -- most home loans in India are floating-rate, so a rate rise after you've borrowed increases your EMI or extends your tenure. Checking affordability at a stressed (higher) rate before committing helps avoid borrowing right up to the edge of what only today's rate can support.

Why might my "existing obligations" message appear even though I make a good income?

If your existing EMIs already consume all or more of your FOIR-allowed budget (income × FOIR%), there's no room left for a new loan at that FOIR cap -- this can happen with a lower FOIR percentage or already-heavy existing debt, and it's the same conclusion a lender's underwriting would reach.