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Home loan guide

How much home loan can I afford?

Banks will happily tell you the maximum they can lend — which is rarely what you should borrow. Here is how to work out a number you can actually live with.

The three rules

RuleGuideline
EMI as % of incomeKeep under ~40% (banks allow up to 50–55%)
Down payment10–25% + ~6% registration & stamp duty
TenureShortest EMI you can afford — longer = more interest

A worked example: ₹1 lakh monthly income

At 40% of income, a comfortable EMI is ₹40,000. At 9% over 20 years, that supports a loan of roughly ₹44 lakh. Add a 20% down payment and you are looking at a home of around ₹55 lakh. Push the EMI to the bank’s 50% limit and you could borrow more — but your monthly breathing room shrinks.

One caution: over 20 years, a ₹44 lakh loan at 9% costs about ₹51 lakh in interest alone — more than the loan itself. That is why a bigger down payment and prepayments matter so much.

The takeaway

Borrow for the EMI you can afford, not the maximum you are offered. Then prepay early, when interest is highest, to save lakhs.

Find your number

Check your eligibility, then the EMI and total interest.

Eligibility Calculator →EMI Calculator →

Frequently asked

How much of my income should go to the EMI?
Keep your total EMIs (including any existing loans) under about 40% of your monthly income. Banks may lend up to 50–55% (FOIR), but staying near 40% leaves room for life to happen.
How big a down payment do I need?
Banks fund up to 75–90% of the property, so plan for a 10–25% down payment plus registration and stamp duty (another 5–8%). A bigger down payment means a smaller loan and far less interest.
Should I take the longest tenure for a lower EMI?
A longer tenure lowers the EMI but sharply increases total interest. Pick the shortest tenure whose EMI you can comfortably afford, and prepay when you can.

Illustrative figures at 9% p.a.; bank rates and FOIR limits vary. Estimates for planning, not financial advice.