How much house can I afford?
Short answer: the lower of two limits. Your monthly budget decides how big an EMI you can carry, which sets the largest loan. Your savings, after keeping an emergency fund, decide whether you can pay the down payment and purchase costs on that loan. A typical planning range keeps all EMIs together at about 30–40% of take-home pay.
For example, someone taking home ₹1 lakh a month with ₹20 lakh saved can comfortably look at homes of around ₹48–59 lakh, and up to about ₹63 lakh at a stretch, under the assumptions in the worked example below. Your figure will differ with your expenses, existing loans and interest rate.
How this calculator works
The calculator runs three scenarios that differ only in how much of your income you allow EMIs to take:
- EMI room. For each scenario, the new EMI is the smaller of (a) your EMI-to-income limit minus existing EMIs, and (b) what is left of your take-home income after living expenses, monthly investments, existing EMIs and ownership costs such as maintenance.
- Largest loan. That EMI is converted into the largest loan it can repay at your interest rate and tenure.
- Cash for the purchase. Savings minus your emergency fund is the cash available for the down payment, stamp duty, registration and other purchase costs.
- Maximum price. The price is the highest one where the loan fits both your EMI room and the loan-to-value (LTV) limit, and the down payment plus purchase costs fit your cash.
The calculator then shows which of these limits stopped the budget going higher, and lets you test a specific property price against your numbers.
Affordability rules of thumb
EMI-to-income ratio
Personal-finance planners commonly suggest keeping total EMIs — home loan plus any car, personal or education loans — within about 30–40% of take-home income, treating 50% as an upper stretch. The calculator uses 30% (Conservative), 40% (Balanced) and 50% (Aggressive) by default, and you can change all three. These ratios are rules of thumb, not regulation, and lenders apply their own, different limits.
Why take-home income, not gross salary
Income tax, provident fund and other deductions never reach your account. A 40% ratio on gross salary can easily be 50% or more of what you actually receive, so this calculator works from take-home pay. If you are buying with a spouse or family member who will share the EMI, add their take-home income and expenses.
Keep an emergency fund
A home loan is a fixed commitment for decades. An emergency fund — often several months of expenses and EMIs — lets you keep paying through a job change, illness or a rate rise. The calculator never spends it on the purchase.
Keep investing
Draining every spare rupee into an EMI can leave retirement and children's education unfunded. Entering the monthly investments you want to continue protects them in the budget.
The formula
For an EMI-to-income ratio R:
New EMI = min(Income × R − Existing EMIs, Income − Expenses − Investments − Existing EMIs − Ownership costs)
The largest loan that EMI can repay is the present value of the instalments:
Max loan = EMI × [(1 + r)n − 1] ÷ [r × (1 + r)n]
where r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments. At 0% interest the loan is simply EMI × n. With cash available C (savings − emergency fund), purchase costs c as a share of price and the applicable LTV limit L, the maximum price is:
Price = min[(C + Max loan) ÷ (1 + c), C ÷ (1 + c − L)]
The first term applies when the EMI limits the loan; the second when your savings cannot cover a larger down payment. Because the RBI LTV limit depends on the loan size, the calculator solves this for each LTV slab and takes the best result that respects the slab's loan ceiling.
Worked example: ₹1 lakh take-home salary
Take-home income ₹1,00,000 a month, no existing EMIs, living expenses ₹35,000, investments ₹15,000, maintenance and property tax ₹3,000, savings ₹20 lakh with ₹3 lakh kept as an emergency fund, home loan at 8.5% for 20 years, purchase costs 7% and a maximum LTV of 80%.
- Cash available: ₹20,00,000 − ₹3,00,000 = ₹17,00,000
- Monthly room for a new EMI: ₹1,00,000 − ₹35,000 − ₹15,000 − ₹3,000 = ₹47,000
- Balanced EMI: min(40% × ₹1,00,000, ₹47,000) = ₹40,000
- Largest loan for ₹40,000 at 8.5% over 240 months ≈ ₹46,09,234
- Price = min[(₹17,00,000 + ₹46,09,234) ÷ 1.07, ₹17,00,000 ÷ 0.27] = min(₹58,96,480, ₹62,96,296) = ₹58,96,480
| Scenario | Home loan EMI | Loan | Property price | Left each month | Limited by |
|---|---|---|---|---|---|
| Conservative (30%) | ₹30,000 | ₹34,56,925 | ₹48,19,556 | ₹17,000 | EMI-to-income limit |
| Balanced (40%) | ₹40,000 | ₹46,09,234 | ₹58,96,480 | ₹7,000 | EMI-to-income limit |
| Aggressive (50%) | ₹43,713 | ₹50,37,037 | ₹62,96,296 | ₹3,287 | Savings for down payment |
In the Balanced case the down payment is ₹12,87,246 and purchase costs are ₹4,12,754, which together use the full ₹17 lakh. The monthly housing cost is ₹43,000 (EMI plus ownership costs), and ₹7,000 is left each month after everything else.
The Aggressive scenario shows why both limits matter. A 50% ratio allows ₹50,000 of EMIs, but the monthly budget only leaves ₹47,000. Even that is not fully usable: at an 80% LTV, a home above about ₹63 lakh needs more than ₹17 lakh for the down payment and costs, so savings cap the price and the actual EMI is ₹43,713.
Checking an ₹80 lakh flat with the same numbers: the loan would be ₹64 lakh with an EMI of about ₹55,541 — 55.5% of take-home income, above the Aggressive limit — and the ₹21.6 lakh needed upfront is ₹4.6 lakh more than the cash available.
What limits your budget
EMI-to-income limit
When your expenses are modest, the ratio you choose is the binding limit. At 8.5% over 20 years, every ₹10,000 of EMI supports a loan of about ₹11.5 lakh, so moving from the Balanced to the Conservative ratio on a ₹1 lakh income lowers the loan by about ₹11.5 lakh.
Monthly cash flow
High living costs, a large SIP or maintenance charges can leave less room than the ratio allows. In that case the ratio does not matter; what is left after your outgoings sets the EMI.
Savings for the down payment
Lenders finance only part of the price, and purchase costs are usually paid in cash. If your savings above the emergency fund are small, they cap the price no matter how high your income is.
Loan-to-value slabs
RBI's guidelines lower the maximum LTV as the loan grows: 90% up to ₹30 lakh, 80% up to ₹75 lakh and 75% above. Just above a slab boundary, a slightly bigger loan needs a noticeably bigger down payment, so the best budget sometimes holds the loan exactly at ₹30 lakh or ₹75 lakh. The calculator also lets you set a lower maximum LTV, since many lenders finance less than the regulatory ceiling.
How to increase what you can afford
- Save a bigger down payment. In the worked example, every extra ₹1 lakh of savings adds about ₹93,000 to the Balanced budget (₹1 lakh ÷ 1.07), because the EMI side has room to spare.
- Choose a longer tenure — with care. At 25 years the same ₹40,000 EMI supports about ₹49.7 lakh instead of ₹46.1 lakh, lifting the Balanced budget to about ₹62.3 lakh. At 30 years savings become the limit and the budget stops at about ₹63 lakh. Each extra year also adds substantially to total interest; the home loan EMI calculator shows the full cost.
- Clear other EMIs first. A ₹10,000 car loan EMI takes the same space as ₹10,000 of home loan EMI. In the example it would cut the Balanced budget from about ₹59 lakh to about ₹48 lakh.
- Add a co-applicant. Combining incomes and savings with a spouse or parent raises both limits, but both of you become responsible for the full loan.
- Get a better rate. At 9.5% instead of 8.5%, the Balanced budget in the example falls from about ₹59 lakh to about ₹56 lakh. A good credit score helps you negotiate.
Costs people forget
- Stamp duty and registration, which vary by state, property value and sometimes the buyer's gender. The property purchase cost calculator helps you get a precise figure to use in place of the 7% default.
- GST on under-construction homes, plus parking, club membership and preferential location charges on the builder's cost sheet.
- Loan processing fees, legal and technical checks, and brokerage if you use an agent.
- Maintenance deposits, society transfer charges, interiors, furniture and moving costs, which can add lakhs in the first year.
- Ongoing costs: monthly maintenance, property tax and home insurance. Enter them as ownership costs so they reduce your monthly room.
If you are still deciding whether to buy at all, the rent vs buy calculator compares the long-term cost of owning with renting and investing the difference.
Affordability vs bank eligibility
A lender's eligibility check asks how much it is willing to lend. It typically looks at your income, age, existing EMIs, credit score and the property, and may allow a higher share of income for EMIs than you would choose. This calculator asks a different question: how much you can repay without giving up your emergency fund, your investments or your day-to-day comfort.
Use both. The home loan eligibility calculator estimates the loan you may qualify for. If it is higher than your affordable loan here, the gap is room you can choose not to use. If it is lower, the lender's limit will bind, and you will need a larger down payment or a lower price.