A Bengaluru software professional walked into a bank last month expecting to be sanctioned a loan large enough for a 90 lakh flat, only to be offered noticeably less. His salary was healthy, but a car loan and a personal loan were quietly eating into the amount a lender was willing to give. Home loan eligibility is not a single number pulled from your payslip. It is the lower of two ceilings, one set by your income and one set by the property, and knowing how both work tells you how much house you can actually fund before you fall for one you cannot.

The short answer. A lender sanctions the lower of two figures, an income based limit and a property based limit. The income limit comes from your FOIR, the share of your monthly income that can go to all loan EMIs together, usually capped around 40 to 50 percent. The property limit comes from the loan to value rule, which lets banks fund up to 90 percent of a small loan, 80 percent in the middle band and 75 percent on large loans, with you paying the rest. The trade off is that existing EMIs, a modest income or a large price all pull your eligibility down, so the real number is often below what a salary alone suggests.

How do lenders decide how much I can borrow?

They calculate two separate ceilings and sanction the lower one. The first ceiling is income based, working out how large an EMI your income can support after your existing obligations, then converting that EMI into a loan amount at the current rate and tenure. The second ceiling is property based, applying the loan to value limit to the property's value. Your sanction is whichever of these two is smaller, as explained in these RBI linked home loan guidelines. This is why two people buying the same flat can be offered very different loans, because their incomes and existing debts differ, and why a big salary does not help if the property based ceiling is the binding one, or the other way round.

What is FOIR and how does it cap my loan?

FOIR, the fixed obligation to income ratio, is the share of your monthly income that all your loan EMIs together are allowed to consume. Lenders set their own limit, but the industry norm sits around 40 to 50 percent, and guidance points to caps near 50 percent for salaried and 45 percent for self employed borrowers. Crucially, FOIR counts your existing EMIs too, so a car loan or personal loan reduces the room left for a home loan EMI. If your net income is one lakh a month and your lender uses a 50 percent FOIR, your total EMIs can be up to 50,000 rupees. If you already pay 15,000 in other EMIs, only 35,000 is left for the home loan, which directly shrinks the amount you can borrow.

What is the loan to value limit and my down payment?

The loan to value limit caps how much of the property a lender can finance, so it sets your minimum down payment. Under the RBI framework, banks can lend up to 90 percent of the value on loans up to 30 lakh, up to 80 percent on loans between 30 and 75 lakh, and up to 75 percent on loans above 75 lakh. That means your own contribution rises with the loan size, from around 10 percent at the smaller end to 25 percent at the larger end. Remember too that stamp duty, registration and other charges sit outside the loan, so your upfront cash is the down payment plus those statutory costs, not just the down payment alone.

How much loan can I get on my salary?

As a rough guide, your salary sets the EMI you can afford, and that EMI translates into a loan amount at current rates. Take a net income of one lakh a month with no existing EMIs and a 50 percent FOIR. That allows a home loan EMI of about 50,000 rupees, which at a rate near 8.5 percent over 20 years supports a loan of roughly 57 to 60 lakh. Add an existing EMI of 15,000 and the room drops to 35,000, cutting the eligible loan to around 40 lakh. Lower rates lift these figures and higher rates trim them, which is why current rates matter, a link we cover in our guide to the home loan EMI at the repo rate.

Tenure and age quietly shape this too. A longer tenure lowers the EMI and so lifts the eligible loan for the same income, which is why a younger borrower who can take a 25 or 30 year loan is often eligible for more than an older borrower limited to a shorter term ending at retirement. Lenders usually want the loan to close by a working age ceiling, so someone applying in their late forties may be capped at a shorter tenure and therefore a smaller loan on the same salary. This is not a reason to stretch the tenure to its limit, since a longer loan costs far more interest in total, but it explains why two people on identical pay can be offered different amounts purely because of their age and the tenure available to them.

How do existing EMIs and my credit score change it?

Existing EMIs cut your eligibility directly, and a weak credit score can cut it twice over. Every EMI you already pay reduces the FOIR room left for a home loan, so clearing or closing a small loan before you apply can visibly raise your sanction. Your credit score works differently but powerfully. A strong score earns a lower interest rate, which by itself supports a larger loan for the same EMI, and it also makes lenders comfortable extending closer to their FOIR and loan to value ceilings. A weak score can mean a higher rate, a lower sanction, or both. We explain that link in our note on the CIBIL score and loan eligibility.

How can I increase my home loan eligibility?

You have several honest levers, and they stack. Closing existing small loans frees FOIR room for a larger home loan EMI. Adding a co applicant, such as an earning spouse, pools two incomes and can lift the income based ceiling substantially. Choosing a longer tenure lowers the EMI and raises the eligible loan, though it increases total interest. Improving your credit score before you apply earns a better rate and a more generous view from the lender. And a larger down payment reduces how much you need to borrow in the first place. If you are eyeing a specific home, for example in Sobha in Hennur Bagalur, run these levers before you apply so your sanction matches the price.

What should a Bengaluru buyer check?

Work through these seven steps to know your real eligibility before you shortlist a home.

1. Add up your existing EMIs, since they reduce the FOIR room for a home loan.
2. Estimate your income based ceiling using a FOIR of around 40 to 50 percent.
3. Apply the loan to value limit for your loan size to find the property based ceiling.
4. Take the lower of the two ceilings as your realistic sanction.
5. Add stamp duty, registration and charges to your own contribution, not just the down payment.
6. Consider a co applicant to pool incomes and lift the income ceiling.
7. Improve your credit score and close small loans before you formally apply.

Home loan eligibility feels opaque until you see it as two ceilings, and then it becomes something you can plan and improve. Work out your income based limit from your FOIR, apply the loan to value rule for the property, take the lower number, and remember the statutory charges that sit outside the loan. Do that before you fall for a flat, and you shop within a budget the bank will actually back rather than one it will quietly cut. A good habit is to get an in principle sanction from your lender early, since it fixes your working budget in writing and lets you negotiate from a position of certainty rather than hope.

Frequently asked questions

How do lenders decide my home loan amount? They calculate two ceilings and sanction the lower one. The income ceiling comes from your FOIR, converting the EMI your income can support into a loan amount at the current rate and tenure. The property ceiling comes from the loan to value rule applied to the property's value. Your sanction is whichever of these two figures is smaller.

What is FOIR in a home loan? FOIR, the fixed obligation to income ratio, is the share of your monthly income that all loan EMIs together can consume, usually capped around 40 to 50 percent. It includes your existing EMIs, so a car or personal loan reduces the room left for a home loan EMI, which in turn lowers the amount you can borrow for a house.

How much down payment do I need? It depends on the loan to value limit for your loan size. Banks can fund up to 90 percent on loans up to 30 lakh, 80 percent between 30 and 75 lakh, and 75 percent above 75 lakh, so your minimum contribution runs from about 10 to 25 percent. Stamp duty and registration are extra.

How can I get a bigger home loan? Close existing small loans to free FOIR room, add an earning co applicant to pool incomes, choose a longer tenure to lower the EMI, and improve your credit score for a better rate. A larger down payment also reduces how much you need to borrow. These levers stack, so applying a few together can lift your sanction meaningfully.

Last updated 2026-08-26. PropNewz Team.