worldofcalcsHome Affordability Calculator
How much house can you afford?
The price you can afford depends on two things: how big a loan your income supports, and how much cash you have for the down payment and buying costs. This calculator uses the rules Indian banks apply to find the most expensive home that fits both.
How the limit is worked out
Banks cap your EMIs, including existing ones, at a share of your take-home pay called FOIR, usually 40–55%; this calculator uses 50%. The loan that EMI supports is the income limit. RBI also caps the loan at 90% of the price up to ₹30 lakh, 80% up to ₹75 lakh and 75% above that, so your savings must cover the rest of the price plus stamp duty and registration. The calculator finds the highest price that meets every limit.
Before you start house-hunting
- Keep an emergency fund of 6 months' expenses on top of the down payment. Don't put every rupee of savings into the house.
- Just because the bank allows a 50% EMI doesn't make it comfortable. Many planners suggest keeping the home loan EMI to 30–40% of take-home pay.
- Stamp duty and registration vary by state, usually 5–8% of the price in total; women buyers get a lower rate in several states.
- Add a co-applicant's income to borrow more, but both of you will be responsible for the EMIs.
- Each existing EMI cuts the loan you can get. Paying off a car or personal loan before applying can raise your limit noticeably.
- Budget for interiors, furnishing, society deposits and moving costs, which banks don't finance.
Worked example
- Take-home pay ₹1,00,000 a month, no other loans, ₹15 lakh saved; loan at 8.5% for 20 years
- EMI limit at 50%: ₹50,000 a month, which supports a loan of up to ₹57.6 lakh
- But the savings set a lower limit: a ₹55.55 lakh home needs 20% down (₹11.1 lakh) plus 7% buying costs (₹3.9 lakh), using all ₹15 lakh
- Most you can afford: ₹55,55,000, with a loan of ₹44,43,850 and an EMI of ₹38,565
- With ₹40 lakh saved, income becomes the limit: about ₹91 lakh, with the full ₹50,000 EMI
Affordable home price by income
With savings of 15 months' take-home pay, no other loans, 8.5% for 20 years and 7% buying costs.
| Take-home a month | Savings | Home price | Loan | EMI | Limited by |
|---|---|---|---|---|---|
| ₹50,000 | ₹7,50,000 | ₹33,93,000 | ₹28,80,510 | ₹24,998 | Income |
| ₹75,000 | ₹11,25,000 | ₹41,66,000 | ₹33,32,620 | ₹28,921 | Savings |
| ₹1,00,000 | ₹15,00,000 | ₹55,55,000 | ₹44,43,850 | ₹38,565 | Savings |
| ₹1,50,000 | ₹22,50,000 | ₹83,33,000 | ₹66,66,310 | ₹57,852 | Savings |
| ₹2,00,000 | ₹30,00,000 | ₹98,13,000 | ₹74,99,910 | ₹65,086 | Savings |
Where savings set the limit, saving more raises the price you can afford; where income does, a longer tenure or co-applicant helps.