Home loan eligibility explained: income, FOIR, age, LTV and the property itself

The short answer

A lender works out three limits and lends you the lowest. The first is repayment capacity: how large an EMI your income can carry once your existing loan instalments are counted, which lenders measure with a ratio called FOIR (fixed obligations to income ratio). The second is the loan-to-value (LTV) cap: the Reserve Bank of India does not allow a housing loan above 90 per cent of the property's value for loans up to ₹30 lakh, 80 per cent for loans above ₹30 lakh and up to ₹75 lakh, and 75 per cent above ₹75 lakh. The third is the property itself: if its title, approvals or construction do not pass the lender's legal and technical checks, the lender will not lend against it at all, whatever your income.

Your age matters because it caps the tenure, and a shorter tenure means a higher EMI for the same loan, which in turn lowers the loan your income supports. Your credit history matters because it decides whether you get a loan at all and at what rate. Adding an earning co-applicant can raise the income side; it cannot raise the LTV cap.

This guide walks through each limit with worked numbers, explains what changes for salaried and self-employed applicants, and lists the documents to keep ready. Everything here is how lenders commonly assess loans; each lender sets its own policy within the RBI rules, so a written sanction from the lender is the only firm answer.

Limit one: what your income can repay (FOIR)

FOIR is the share of your monthly income that goes to fixed loan repayments, including the new home loan EMI. Lenders set a maximum FOIR in their credit policy, and it commonly falls somewhere between 40 and 65 per cent of net monthly income, higher for larger incomes and lower for smaller ones. There is no single RBI figure; each lender decides, and some use gross income rather than net. Ask the lender which income figure and which FOIR it is applying to you.

Existing EMIs count first: car loans, personal loans, education loans, consumer durable loans and, at many lenders, a notional share of your credit card limit or outstanding balance. Whatever room is left under the FOIR ceiling is the most the new home loan EMI can be.

Worked example (illustrative; assume an 8.5 per cent interest rate): your net take-home pay is ₹1,00,000 a month and you pay a ₹12,000 car EMI. If the lender's FOIR ceiling for you is 50 per cent, total EMIs can be ₹50,000, so the home loan EMI can be up to ₹38,000. At 8.5 per cent over 20 years, each ₹1 lakh of loan costs about ₹868 a month, so ₹38,000 supports a loan of about ₹43.8 lakh (₹38,000 ÷ ₹868 × ₹1 lakh).

Two levers follow from the arithmetic. Closing the ₹12,000 car loan before applying would let the whole ₹50,000 go to the home loan and support about ₹57.6 lakh. A longer tenure also lowers the EMI per lakh: over 25 years it is about ₹805, so ₹38,000 would support about ₹47.2 lakh. A longer tenure costs more interest in total, which our EMI, tenure and prepayment guide explains.

Limit two: age and tenure

Lenders cap the tenure so that the loan ends before a set age, commonly around retirement for salaried borrowers and somewhat later for self-employed borrowers; the exact age is lender policy, not an RBI rule. Most also cap tenure at 25 to 30 years in any case. The older you are when you apply, the shorter the tenure on offer.

Continuing the example: if you are 45 and the lender requires the loan to end by 60, the tenure is 15 years. At 8.5 per cent, each ₹1 lakh then costs about ₹985 a month, and ₹38,000 supports about ₹38.6 lakh instead of ₹43.8 lakh. Same income, same rate, roughly ₹5 lakh less loan, purely because of age.

A younger earning co-applicant, such as an adult child, is one common way lenders allow a longer tenure, because the tenure can be based on the younger borrower's age. The co-applicant then becomes liable for the whole loan, so this is a family decision, not just a paperwork trick.

Limit three: the loan-to-value cap

The Reserve Bank's caps on individual housing loans are 90 per cent of the property's value where the loan is up to ₹30 lakh, 80 per cent where the loan is above ₹30 lakh and up to ₹75 lakh, and 75 per cent where the loan is above ₹75 lakh. The value used is the lower of the agreed price and the lender's own valuation, and stamp duty, registration and other documentation charges are left out of the cost, except where the house costs no more than ₹10 lakh, when the lender may include them.

These are ceilings, not entitlements. A lender can lend less, and often does for older buildings, unusual properties or borrowers it considers riskier. Housing finance companies follow the same housing-loan LTV ceilings under their own RBI directions.

Worked example: you agree a resale flat at ₹55 lakh and the lender's valuer agrees with that figure. A loan of ₹44 lakh would be 80 per cent, inside the cap for loans between ₹30 lakh and ₹75 lakh. Your income limit from the FOIR example was ₹43.8 lakh at 20 years. So the loan offered is about ₹43.8 lakh, set by income, and you need about ₹11.2 lakh of your own money towards the price, plus stamp duty, registration and the other costs our down payment guide lists.

If the valuer had put the flat at ₹50 lakh, the cap would be 80 per cent of ₹50 lakh, or ₹40 lakh, and the property would become the binding limit. A low valuation is a warning sign worth taking seriously: the lender is telling you it thinks the price is high.

The property must pass the lender's checks

A home loan is secured by a mortgage of the property, so the lender checks the property as carefully as it checks you. The legal check, done by the lender's empanelled advocate, reads the title chain, usually going back several years, the encumbrance certificate, mutation and tax records, and, for a flat, the builder's title, the approvals and the RERA registration. The advocate's report says whether the title is clear and marketable and which original documents must be deposited with the lender.

The technical check is a site visit by the lender's engineer or valuer. It confirms that what is built matches the sanctioned plan, notes the age and condition of the building, measures the area, and values the property. Unauthorised floors, deviations from the plan, or a building on land not meant for housing can sink an application at this stage.

Many lenders keep lists of 'approved projects' they have already checked. A loan on a flat in such a project is quicker, but it does not replace your own checks: the lender's approval protects the lender's security, not your purchase. Our property documents guide lists what to read yourself.

Some property is outside home loans altogether. Agricultural land is not financed as housing; a plot needs a plot loan, which has its own rules (see our plot and construction loan guide); and many lenders will not lend on properties in unapproved layouts or on buildings without the required approvals.

Credit history: the gate before the arithmetic

Before any of the limits matter, the lender pulls your credit report from one or more of the credit information companies. Missed payments, written-off or settled accounts, and many recent loan enquiries can lead to a refusal or a higher rate, regardless of how much you earn.

Check your own report before you apply, and fix any errors first; the process and the Reserve Bank's timelines are in our credit score guide.

Co-applicants: adding income, not adding LTV

A co-applicant's income is added to yours when the lender calculates FOIR, and their EMIs are added too. Lenders commonly accept a spouse, parent, or adult child as a co-applicant; many require every co-owner of the property to be a co-applicant, though a co-applicant need not always be a co-owner.

Worked example: you earn ₹1,00,000 net with a ₹12,000 car EMI, and your spouse earns ₹60,000 net with no loans. Combined income is ₹1,60,000; at a 50 per cent FOIR, total EMIs can be ₹80,000, leaving ₹68,000 for the home loan. At 8.5 per cent over 20 years that supports about ₹78 lakh. The income limit has nearly doubled, but the LTV cap has not moved: on a ₹55 lakh flat, the loan still cannot exceed ₹44 lakh.

Every co-applicant is jointly and severally liable for the whole loan, and the loan appears on every co-applicant's credit report. If one person stops paying, the lender can recover the full amount from the others. Our women and joint home loans guide covers co-ownership, stamp duty concessions and how tax deductions split.

Salaried vs self-employed: what changes

For salaried applicants, lenders usually take the net monthly salary from recent salary slips and bank statements, check Form 16 or income tax returns for the last year or two, and verify the employer. Fixed pay counts most; variable pay, bonuses and allowances are often counted only partly or averaged. A probation period or a very recent job change can delay or reduce a sanction.

For self-employed applicants and professionals, lenders work from income tax returns, usually for two or three years, with the computation of income, audited or CA-certified profit and loss account and balance sheet, GST returns where applicable, and business bank statements. The income figure is the one in the returns, not the cash flow you describe: aggressive tax planning that shows low profits also shows low eligibility. Lenders also look for business continuity, commonly at least a few years in the same line of business.

Rental income, pensions and interest income are counted by some lenders, often at a discount, if they appear in the returns and the bank statements. Undisclosed income does not count.

Documents to keep ready

Identity and address: PAN (mandatory), Aadhaar or another officially valid document, and passport-size photographs.

Income, salaried: salary slips for the last few months, Form 16 or income tax returns for the last one or two years, bank statements of the salary account for six months or so, and an employment letter if recently joined.

Income, self-employed: income tax returns with computation for two or three years, CA-certified or audited financial statements, proof of business existence (GST registration, shop and establishment licence, or professional registration), and six to twelve months of business and personal bank statements.

Property: the agreement for sale or allotment letter, the title documents and chain, the approved building plan, the encumbrance certificate, the RERA registration for a new project, the occupancy or completion certificate where issued, the society or builder NOC, and receipts for payments already made. The lender's legal team will ask for more if the chain needs it.

Existing loans: sanction letters or statements of current loans, so the EMIs on your credit report can be matched.

Putting it together: a worked eligibility sheet

Assume 8.5 per cent and a 20-year tenure for a 35-year-old salaried applicant with ₹1,00,000 net income, a ₹12,000 car EMI, and a lender FOIR ceiling of 50 per cent. The flat costs ₹70 lakh and is valued at ₹70 lakh.

Income limit: ₹50,000 − ₹12,000 = ₹38,000 for the EMI, supporting about ₹43.8 lakh. LTV limit: the loan would be above ₹30 lakh and up to ₹75 lakh, so 80 per cent of ₹70 lakh = ₹56 lakh. Property check: assume passed. Eligible loan = the lower figure, about ₹43.8 lakh.

Gap to fund from savings: ₹70 lakh − ₹43.8 lakh = ₹26.2 lakh towards the price, plus stamp duty, registration and costs. Options to narrow it: add the spouse as co-applicant (which lifts the income limit to about ₹78 lakh, so the LTV cap of ₹56 lakh becomes the binding limit and the gap falls to ₹14 lakh), close the car loan, or choose a cheaper flat. What does not work is borrowing the down payment through a personal loan: it adds an EMI that reduces the home loan you qualify for, and many lenders ask where the margin money came from.

Common mistakes

Paying a booking amount before checking eligibility. Ask for an in-principle approval, then a sanction, before committing money you cannot get back.

Assuming the LTV cap is what you will get. The cap is a ceiling; your income or the valuation is often the binding limit.

Forgetting that stamp duty and registration are outside the loan for any home above ₹10 lakh, so they must come from savings.

Applying to several lenders at once without a plan. Each formal application can show as an enquiry on your credit report; shortlist first.

Adding a co-applicant without both people understanding that each is liable for the whole loan.

Under-reporting income in tax returns, then expecting a lender to count it.

Choosing a property in an unapproved building or layout and discovering at the legal check that no lender will finance it.

Common questions

Sources

• Reserve Bank of India, Master Circular – Housing Finance (2025-26 edition, rbi.org.in) and the housing finance provisions carried into the consolidated Master Directions of 28 November 2025 — loan-to-value caps of 90 per cent (loans up to ₹30 lakh), 80 per cent (above ₹30 lakh to ₹75 lakh) and 75 per cent (above ₹75 lakh); stamp duty, registration and documentation charges excluded from the property cost except where the dwelling costs up to ₹10 lakh; checked 2 October 2026
• Reserve Bank of India (Housing Finance Companies) Directions, 2025, issued 28 November 2025 (rbi.org.in) — housing-loan LTV ceilings for HFCs; checked 2 October 2026
• FOIR ranges, tenure and age limits: lender product pages and eligibility explainers (for example SBI, HDFC Bank, ICICI Bank, LIC Housing Finance); these are lender policies, not RBI rules, and vary; checked 2 October 2026
• EMI figures computed with the standard reducing-balance formula at an assumed 8.5 per cent; not a quote

Last checked 2026-10-02.