How much house can you actually afford? The honest answer comes from working backwards — your net monthly income minus existing EMIs gives the EMI capacity, the EMI capacity at a given rate and tenure gives the maximum loan, and the loan plus your down payment gives the maximum home price. This calculator does that math so you can shortlist properties realistically before falling for a number you cannot service.
What is House Affordability?
Banks decide your home loan eligibility based on FOIR (Fixed Obligation to Income Ratio) — typically capping all your EMIs combined at 40-55% of net monthly income. The exact percentage depends on income level and credit score. They also cap the loan-to-value (LTV) ratio at 75-80% for first homes, meaning you put down at least 20-25%.
These two constraints together set your maximum home price. The calculator shows the price band you should be looking in, not the price band a salesperson wants you to consider. The difference is often 20-40% — and the gap is where buyer regret lives.
How affordability is calculated
Step 1: figure out the maximum monthly EMI you can afford. This equals (FOIR × net income) − existing EMIs. With FOIR at 45% and ₹1 lakh net income and no existing EMIs, max EMI is ₹45,000.
Step 2: convert that EMI to a maximum loan amount using the EMI formula in reverse. ₹45,000 EMI at 9% for 20 years works out to about ₹50 lakh loan. Step 3: add your down payment to the loan to get the maximum home price. ₹50 lakh loan + ₹15 lakh down payment = ₹65 lakh home.
- FOIR
- Fixed Obligation Ratio—0.40 to 0.55 typical (40-55%)
- r
- Monthly rate—annual rate / 12 / 100
- n
- Months—tenure in years × 12
How to use this calculator
Enter your net monthly income
Use take-home (after tax, EPF, professional tax, and any other deductions) — not CTC. Banks use net for FOIR calculations and so should you.
Add up your existing EMIs
Car loan EMI, personal loan EMI, education loan EMI, and the minimum due on credit cards. These all count against your FOIR limit. If you can prepay or close any before applying, the home loan eligibility goes up.
Enter your available down payment
Cash you have ready, plus the savings you can liquidate without breaking long-term goals like retirement or your emergency fund. Stamp duty and registration are 5-8% on top — keep that aside separately.
Set the interest rate and tenure
Use the rate you've been quoted, or the prevailing rate for your credit profile (8.5-9.5% for prime borrowers in 2026). Tenure is usually 20 or 30 years for affordability calculations — a longer tenure increases your max price but raises total interest.
Read the affordability range
The calculator shows max EMI, max loan amount, and max home price. Treat this as a ceiling, not a target. Most buyers should aim for 75-85% of max to leave room for unexpected expenses and rate hikes.
When to use it
Property shortlisting
Run the calculator before you start visiting properties. Anchoring on the comfortable-not-maximum price keeps you from falling in love with homes you cannot service over 20 years.
Comparing single vs joint application
Adding a co-applicant (spouse, parent) increases combined income and FOIR-based capacity. Run the calculator with both incomes — the price band typically jumps 50-80%.
Checking affordability after a job change or kid
Life events change income and expenses. Re-run the calculator before committing to any new property purchase or upgrade — what was affordable two years ago may not be now.
Common mistakes to avoid
Using CTC instead of net take-home
CTC is gross — what the company spends on you. Net take-home is what reaches your account. Banks underwrite on net; you should plan on net.
Forgetting stamp duty, registration, brokerage, interior costs
Total transaction cost is typically 8-15% of the home price (stamp duty 5-8%, brokerage 1-2%, interiors 5-10%). Add this to the down payment when checking what cash you actually need.
Stretching tenure to 30 years just to afford a bigger home
30-year tenure gives you a 15-20% bigger home but you pay roughly 70% more total interest. The math rarely works in favour of the bigger home.
Buying at the maximum and being house-poor
Living in a fancy home you can barely service is a recipe for stress and forced selling at the wrong time. Aim for the home that fits at 75-80% of capacity, not 100%.
Frequently asked questions
What is FOIR and why does it matter?
Should I use net income or gross (CTC)?
Why aim for 85% of max instead of the maximum?
Does adding a co-applicant change my max?
What about stamp duty and registration?
Are variable bonuses or rental income counted?
References
- RBI guidelines on home loan LTV ratios— Reserve Bank of India