Skip to main content
Desi Calculator Logo Desi Calculator
Skip to main content
Smart Finance 🇮🇳

Borrow Capacity Calculator — Calculations & Slabs for FY 2026-27

Enter your net monthly income, existing EMIs, and preferred tenure to find the maximum loan amount a bank will typically approve using the 40-50% FOIR rule.

1. Income & Obligations

Frequently Asked Questions (FAQ)

What is FOIR (Fixed Obligation to Income Ratio)?

FOIR is a key metric used by banks to assess your loan eligibility. It represents the percentage of your monthly take-home salary that goes towards paying fixed obligations like EMIs and rent. Most banks restrict your maximum FOIR to 50% to 60% so you have enough income left for living expenses.

How do existing EMIs affect my borrowing capacity?

Lenders subtract your existing monthly EMIs (car loans, credit cards, personal loans) directly from your maximum eligible EMI budget. For example, if your FOIR budget allows an EMI of ₹40,000 and you already pay ₹10,000 in EMIs, your new maximum affordable EMI becomes ₹30,000, which drastically lowers your loan capacity.

How can I increase my maximum loan capacity?

You can increase your loan capacity by: 1) adding a co-applicant (spouse/parent) to combine incomes, 2) paying off existing high-interest short-term loans to free up your EMI budget, 3) opting for a longer tenure (e.g. 25-30 years) which lowers the monthly EMI per lakh borrowed.

What is the standard down payment required for a home loan in India?

In India, the RBI mandates that banks cannot fund 100% of a property purchase. The maximum Loan-to-Value (LTV) ratio is usually capped between 75% and 90% depending on the property value. Therefore, you are required to pay a minimum of 10% to 25% (typically 20%) of the agreement value upfront as a down payment.

Where can I verify the source data for this calculator?

You can verify the values against the official notifications listed in our data sources section at the bottom of the page.

Saved to Browser History!

Your calculation is securely saved to this device. No account required!

About This Calculator

Target Audience: Salaried taxpayers, investors & retirees planning Indian tax & wealth growth

What Does This Calculator Do?

This calculator computes the maximum loan amount you can qualify for based on your net monthly salary, existing debt commitments, and the Fixed Obligation to Income Ratio (FOIR) standard. It also estimates the recommended 20% down payment and the target property value you can afford.

engine_type: compiled | format: inr

How to Use It

  1. Monthly Take Home Salary (₹): Enter your net monthly salary after taxes.
  2. Existing EMIs (₹): Enter any monthly debt payments (like car loans or personal loans) you are currently paying.
  3. Interest Rate (%): Enter the expected annual interest rate for your new loan.
  4. Tenure (Years): Enter the desired repayment period in years.
  5. FOIR Limit (%): Select your lender's FOIR limit (typically 50% for middle-income earners).

The Logic Explained Simply

  • The Concept: Lenders use the Fixed Obligation to Income Ratio (FOIR) to determine how much of your monthly income can be safely allocated toward paying EMIs. Any existing EMIs are subtracted from this limit, and the remainder is the maximum affordable EMI. This monthly amount is then back-calculated to find the maximum principal amount you can borrow.
  • The Formula:

Max Monthly Outgo = Take Home Salary × (FOIR / 100)

Max Affordable EMI = Max Monthly Outgo - Existing EMIs

Max Loan Amount = Max EMI × [((1+r)^n - 1) / (r × (1+r)^n)]

where r is the monthly interest rate and n is the tenure in months.

Real-World Calculation Breakdown

Suppose you have a take-home salary of ₹80,000 per month, with no existing EMIs, and you apply for a home loan at 8.5% interest for 20 years (240 months). The lender applies a FOIR of 50%.

  • Max Monthly Outgo = ₹80,000 × 50% = ₹40,000
  • Max Affordable EMI = ₹40,000 - ₹0 = ₹40,000
  • Monthly rate (r) = 8.5 / 12 / 100 = 0.007083
  • Max Loan Amount = ₹40,000 × [((1.007083)^240 - 1) / (0.007083 × (1.007083)^240)] = ₹46,09,568
  • Recommended Down Payment (20%) = ₹11,52,392
  • Max Property Value = ₹57,61,960

You Might Also Like

Indian Tax Regime Calculator

This tool compares how much tax you owe under the two options provided by the government. It calculates your tax usin...

Step-Up SIP Calculator

This tool shows how your money grows when you invest a fixed amount every month and increase that amount once every y...

PPF Calculator

This tool helps you calculate the guaranteed money you will get from a government-backed savings plan. It tells you e...

SSY Calculator

This tool calculates the future wealth you can build for your daughter using a special government savings scheme. It ...