What You Can Actually Afford, Using the Same Rule Banks Use
A home affordability calculator answers a narrower and more useful question than an EMI calculator: given what you earn and what you already owe, how large a home loan will a lender sanction, and what property price does that support? Lenders decide this with the Fixed Obligation to Income Ratio, or FOIR — the share of your monthly income they will let all your loan instalments consume. Everything above that line is assumed to be living costs. First-time buyers setting a search budget, people carrying a car or personal loan who want to know what headroom is left, and anyone deciding between a longer tenure and a bigger down payment all start here rather than with a property listing.
The method runs in three moves. Your maximum instalment is monthly income multiplied by FOIR, minus the EMIs you already pay: maxEMI = (income × FOIR) − existing EMIs. FOIR defaults to 50 per cent but is an input you control, because lenders genuinely differ — BankBazaar documents banks working between 40 and 60 per cent, stretching to 70 per cent for high net worth applicants, and a calculator that hardcodes one number is quietly wrong for most users. That instalment becomes a principal by inverting the EMI formula: P = EMI × ((1+r)ⁿ − 1) ÷ (r(1+r)ⁿ), where r is the annual rate divided by 12 and by 100, and n is the tenure in months. The property price is then the loan divided by one minus your down payment share, since the loan funds only the rest. Stamp duty and registration apply to that price.
Start with a net monthly income of ₹1,00,000, no existing EMIs, a 50 per cent FOIR, 9 per cent interest and a 20-year tenure. Your maximum instalment is ₹50,000, and inverting the EMI formula turns that into a loan of ₹55,57,248. With a 20 per cent down payment the property price you can target is ₹69,46,560, of which ₹13,89,312 is your own contribution. Add 6 per cent stamp duty and 1 per cent registration on that price and the cash you must have on registration day rises to about ₹18,75,570 — nearly ₹5 lakh more than the down payment alone. Now add an existing car loan EMI of ₹12,000 and raise the income to ₹1,50,000: the instalment headroom becomes ₹63,000 and, at 8.5 per cent over 25 years, the loan rises to ₹78,23,880.
The rate sensitivity table is where most decisions actually get made. Holding the same ₹50,000 instalment and 20-year tenure, an 8 per cent rate supports ₹59,77,715 while 10 per cent supports only ₹51,81,231 — a two-point spread swings your budget by ₹8 lakh, which is more than most buyers gain by negotiating on price. Other real uses: a couple pooling incomes enters the combined figure to see how much a co-applicant adds; someone with a ₹6,000 personal loan EMI checks whether clearing it early buys more house than saving the same money as down payment; and a buyer choosing between 20 and 25 years sees exactly what the longer tenure adds to the sanction, and what it costs in total interest across the extra sixty instalments.
One pitfall matters more than the arithmetic: the maximum a bank will lend is not the amount you should borrow. FOIR at 50 per cent assumes half your income covers everything else, which is tight once school fees, insurance and maintenance arrive, and a rate reset on a floating loan raises the instalment on a budget you set at the ceiling. Borrowing at 40 per cent FOIR costs you house size and buys you sleep. This is an affordability envelope, not a sanction — your credit score, age against retirement, employer category and the property's legal valuation all move the final figure, and RBI loan-to-value norms cap how little you may put down. Everything runs in your browser, so your income details are never uploaded.
