How much home can you afford?

Most people start house-hunting with a price in mind and work backwards to a loan. The sums work better the other way round. Two numbers decide what you can buy: how much you can repay each month, and how much you have saved. The first sets the loan. The second has to cover everything the loan will not, which is a good deal more than the down payment.

Put your own numbers into the calculator. It works to the same rules as the rest of this guide: RBI’s limits on how much of a home’s value a bank can lend, Karnataka’s stamp duty and registration, GST on a flat that is still being built, and the stamp duty on the mortgage.

Two limits, not one

The calculator is looking for the point where two limits meet. The first is income. The EMI you can afford, over your tenure and at your interest rate, is worth a certain loan and no more. With ₹1.5 lakh of take-home pay, ₹10,000 of existing EMIs and 40% of take-home set aside for EMIs, the worked example has an EMI budget of ₹50,000, which at 8.5% over 20 years supports a loan of ₹57.62 lakh.

The second is savings. The loan pays for only part of the price, and your savings have to cover the rest of the price and every charge on top of it. With ₹30 lakh saved, the highest price that works is ₹74 lakh: a ₹57.62 lakh loan, ₹16.38 lakh of your own towards the price, and ₹13.31 lakh of charges, which is ₹29.7 lakh of cash in all.

Whichever limit bites first sets the price. In the worked example, income caps the loan and savings then set the price, and that explains something that surprises most buyers: more income on its own does less than you would expect. Add a co-applicant earning ₹60,000 a month and the bank will lend more, but the price you can reach only rises to ₹78 lakh, because your savings still have to cover a larger share of a larger price, and larger charges on it.

The cash the loan will not cover

RBI caps how much of a home’s value a bank can lend, by the size of the loan: 90% on a loan of up to ₹30 lakh, 80% on one of up to ₹75 lakh, and 75% on anything larger. So on most flats in Bengaluru you put in at least a fifth of the price yourself, and on the larger ones a quarter.

On top of that, banks may not count stamp duty, registration and documentation charges in the value they lend against, unless the home costs ₹10 lakh or less. Those come out of your savings, and so does GST on a flat bought under construction. In the worked example the state’s share, stamp duty, registration, GST and the duty on the mortgage, comes to ₹9.61 lakh, before the builder has added anything of its own.

The calculator’s allowance for the builder’s charges and the bank’s fees is a percentage of the price you can change. In our full-cost guide’s worked example they came to about 5%, which is the default here. What the calculator leaves out is time: if you are buying a flat that is still being built, you will pay interest on the loan as it is released, and possibly rent as well, for years before you move in. On the home-loan guide’s example that pre-EMI alone came to ₹8.29 lakh. Budget it separately.

What a bank will lend

No RBI rule says how much of your income can go to EMIs. RBI requires every bank and every housing finance company to lend under a credit policy approved by its board, and it is there, not in any RBI rule, that each lender sets its own limit. Most keep that limit to themselves. Of the eight lenders below, only SBI and Bank of Baroda publish one.

How much of your pay can go to EMIs

SBI sizes a loan on the ratio of your EMIs to your take-home pay, meaning what is left after tax and other deductions from your salary. It says the ratio runs from 20% to 70% depending on your income, but does not publish where each income band starts. Bank of Baroda publishes its whole table, from 40% for the lowest earners to 75% for the highest.

The pattern in both is the same: the more you earn, the larger the share a bank will let go to EMIs, since a larger income still leaves more to live on. It also means a bank’s ceiling can sit well above a comfortable budget. At 70% of take-home pay, the top of SBI’s range, the worked example’s EMI budget would be ₹95,000, enough for a loan of ₹1.09 Cr against the ₹57.62 lakh that 40% supports. Savings would still cap the price, at ₹78 lakh, but it shows how far a lender’s sums can run ahead of yours.

Which income counts

Check what a lender’s own calculator asks for before you trust its answer. SBI, Axis Bank and Kotak work from net, take-home pay; HDFC Bank and LIC Housing Finance ask for gross monthly income. The same salary gives a different answer depending on which one you type in. Our calculator uses take-home pay throughout.

Lenders’ calculators also ask for the EMIs you already pay, and take them off before working out yours. Axis Bank’s counts another loan only if it has more than 12 months left to run, so a car loan that is nearly paid off may not count against you there. How long you have been earning matters too: Bank of Baroda wants a salaried applicant to have been in work for a year, and anyone else for two, and Bajaj Housing Finance asks for three years of work experience or time in business.

How long you can borrow for

Most of these lenders go to 30 years, Kotak Mahindra Bank to 25 and Bajaj Housing Finance to 32. Age is what shortens it. Where a lender sets an age by which the loan must be repaid, the longest tenure you can have is that age minus yours: 25 years at 40 for a loan that must end by 65, and 15 years at 50. The others publish only an age range and decide the tenure case by case. A shorter tenure means a smaller loan for the same EMI: over 15 years instead of 20 years, the worked example’s EMI budget of ₹50,000 supports ₹50.77 lakh rather than ₹57.62 lakh.

Adding a co-applicant

A co-applicant’s income is added to yours, which is why a second earner raises the loan. Lenders limit who it can be. ICICI Bank names a spouse, parent or sibling. Kotak says co-applicants must be related. Bank of Baroda takes close relatives, and anyone else only if they are a joint owner of the home. SBI adds a spouse’s salary when the home is jointly owned or the spouse stands guarantor. And if the home will be jointly owned, HDFC Bank requires every co-owner to be a co-applicant.

So in practice a co-applicant is usually a close relative, and often a co-owner. They sign for the loan too, so the bank can look to either of you for it. A co-applicant can help with the rate as well: LIC Housing Finance prices a joint loan on the higher of the applicants’ credit scores. Our guide to buying a flat jointly covers whose names go on the deed, and what happens if one of you dies.

If a housing finance company turns your application down, RBI requires it to give you its reasons in writing. Ask for them: they tell you what to fix before you apply anywhere else.

Your credit score sets the rate

Lenders price a home loan by your credit score as well as by the size of the loan. Few publish the detail, but LIC Housing Finance publishes its whole grid for salaried borrowers, and the gap from top to bottom is wide. On the worked example’s ₹57.62 lakh loan over 20 years, the EMI is ₹45,189 with a score of 825 and above, at 7.15%, and ₹51,468 with a score of 600–699, at 8.9%. That is ₹6,279 a month, and ₹15.07 lakh over the life of the loan.

Other lenders publish less, but point the same way. Axis Bank charges a higher range to borrowers with a score of 750 or less, or with no credit history, than to those above it. ICICI Bank lists a score of 700 and above in its eligibility. And the lowest rate in each of the ranges in the table goes to the strongest applicants, so read those as the best case, not the offer.

That is why the calculator starts at 8.5%. On 10 Sep 2026 the lowest published rates ran from 7.15% at LIC Housing Finance to 8.5% at ICICI Bank, and 8.5% is at or above all of them, which keeps the sums on the safe side. Once a lender quotes you, put its rate in instead. To compare lenders, use the annual percentage rate on each one’s Key Facts Statement, which counts the fees as well as the interest.

A score is built from your repayment record, so the fixes are slow ones. Pay every EMI and card bill on time, keep card balances well below their limits, and avoid applying for other loans in the months before this one. Pull your credit reports before you apply and get any mistakes corrected, because the lender will be reading the same report.

What you should borrow

A bank’s limit is the most it will lend, not the most you should borrow. Its sums count your income and your existing EMIs. They do not count the rent you may still be paying while the flat is built, school fees, the cost of running a car, or the cushion you would want if one income stopped for a few months. That is why the share of take-home pay in the calculator is yours to set. Pick the share you could still pay in a bad year, not the one a lender would accept.

Stretching the tenure is the other lever people reach for, and it is an expensive one. On the worked example’s ₹57.62 lakh loan, 30 years instead of 20 years costs ₹39.48 lakh more in interest, ₹1.02 Cr against ₹62.38 lakh. It lowers the EMI, but because the savings limit still holds, it lifts the price you can reach only to ₹78 lakh.

Stress-test the EMI

Most home loans are floating-rate, and at a bank the rate follows RBI’s repo rate and resets at least every three months. So check the EMI you could carry if rates rose. On the worked example, a rise of one percentage point takes the EMI from ₹50,000 to ₹53,705, and a rise of two takes it to ₹57,522. If you would rather keep the EMI where it is, the bank will stretch the tenure instead: at one point higher, the loan runs 5 years 9 months longer.

If the two-point figure would break your budget, borrow less now rather than hoping rates stay put. Our guide to home loans on a flat being built covers what the bank has to tell you when the rate changes, and your choices when it does.

Ways to afford more

• A larger down payment. When savings are the limit, as they are in the worked example, every extra rupee saved raises the price you can reach by more than a rupee of extra income does.
• A co-applicant. A second income raises the loan the bank will allow. It helps most when income, not savings, is what holds you back.
• A different flat. A smaller home, or one further out, is the change that moves the numbers most. The flats under ₹1 crore and ₹1–2 crore pages compare what each budget buys today.
• A finished flat. A flat whose whole price is paid after the completion certificate carries no GST, which lowers the cash you need, though finished flats are often priced higher.
• The PMAY interest subsidy. If your household earns ₹9 lakh a year or less and the home costs ₹35 lakh or less, the central scheme may pay part of your interest; the home-loan guide sets out the conditions.

Before you start looking

• Fix your EMI share at a level you could still pay in a bad year.
• Work out your cash budget including stamp duty, registration, GST and the builder’s charges, not just the down payment.
• Pull your free credit reports and correct any errors before you apply.
• Compare Key Facts Statements from more than one lender, on the annual percentage rate.
• Stress-test at two points higher, and keep an emergency fund outside the purchase budget.