Question 1

How do banks calculate home loan eligibility?

Accepted Answer

Banks use the FOIR (Fixed Obligation to Income Ratio) method: they typically allow EMIs up to 50% of your net monthly income, minus your existing EMIs. Your eligible loan is the EMI capacity converted into a loan amount using the rate and tenure.

Question 2

What is the FOIR rule?

Accepted Answer

FOIR is the percentage of monthly income you can commit to EMIs. Most banks use 40–50%. This calculator defaults to 50% and lets you adjust it to match your bank.

Question 3

What factors improve home loan eligibility?

Accepted Answer

Higher income, fewer existing EMIs, a co-applicant (spouse or parent income added), longer tenure, higher down payment, and a good CIBIL score (750+) all increase your eligible amount. Lower interest rate also raises eligibility.

Question 4

How much down payment do I need?

Accepted Answer

Banks finance 75–90% of the property value. For a ₹50 lakh property you'd typically need ₹5–12.5 lakh as down payment (10–25%) depending on LTV norms and your profile.

Question 5

Does CIBIL score affect eligibility?

Accepted Answer

Yes — a score above 750 usually gets the best rates and higher eligibility; below 650 many banks reject or shrink the loan. Improve your score before applying.