🏡 Home Affordability Calculator
Max Loan = EMI × ((1+r)ⁿ − 1) / (r × (1+r)ⁿ)
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Frequently Asked Questions
How do I use the Home Affordability Calculator?
Enter your monthly gross income, any existing EMIs or loan obligations, the EMI-to-income ratio (FOIR) lenders typically allow, the expected home loan interest rate, loan tenure, and the down payment you have saved. Click "Calculate Affordability" to see the maximum home loan you're eligible for and the maximum home price you can afford.
What is FOIR and why does it matter?
FOIR (Fixed Obligation to Income Ratio) is the percentage of your monthly income that lenders allow to go towards all EMIs combined — typically 40-60%. A higher FOIR increases your loan eligibility but leaves less room in your budget for other expenses, so most lenders cap it around 50%.
How is the maximum loan amount calculated?
First, the maximum EMI you can afford is found as (Income × FOIR%) − Existing Obligations. This EMI is then converted to a loan amount using the present value of an annuity formula: Loan = EMI × ((1+r)^n − 1) / (r × (1+r)^n), where r is the monthly interest rate and n is the number of monthly instalments.
Does my down payment increase how much home I can afford?
Yes. The maximum home price is the maximum loan you're eligible for plus the down payment you have available. A larger down payment directly increases the total home price you can afford, without changing your EMI.
How does loan tenure affect affordability?
A longer tenure spreads the EMI over more months, lowering the monthly EMI for the same loan amount — which means you can borrow more within your FOIR limit. However, a longer tenure also means paying significantly more total interest over the life of the loan.
Do existing EMIs reduce my home loan eligibility?
Yes. Lenders look at your total EMI burden across all loans, not just the new home loan. Any existing car loan, personal loan, or credit card EMI is subtracted from your maximum allowable EMI before calculating how much home loan you can take.
Does the maximum home price include stamp duty and registration costs?
No. The "Maximum Home Price" shown is simply your maximum eligible loan plus your down payment — it does not separately account for stamp duty, registration charges, brokerage, or moving/interior costs, which in many Indian states can add 5-8% on top of the property price. Budget for these separately from your down payment savings.
Why does the interest rate have such a big effect on affordability?
The loan amount formula divides your maximum EMI by a factor that depends heavily on the monthly interest rate r. Even a 0.5-1% increase in the annual rate noticeably reduces the loan amount the same EMI can support over a long tenure (e.g. 20 years), because more of each EMI goes towards interest rather than principal — so it's worth shopping for the best rate before estimating affordability.