Price, loans & investment · 18-09-2026 · 7 min read · By Sorrel Buildcon

Home Loan Eligibility — How Much Can You Borrow?

The two tests behind every sanction

Buyers often assume home loan eligibility is a multiple of salary. Lenders actually run two separate tests and then lend the lower of the two answers. The first is an income test, usually expressed as FOIR — the fixed obligations to income ratio. It asks what share of your net monthly income is already committed to EMIs, and how much room is left. Many banks are comfortable when all EMIs together, including the new home loan, stay within about 40–50% of take-home pay; some stretch further for high incomes, and each lender has its own policy.

The second is a property test, the loan-to-value ratio (LTV). The Reserve Bank caps how much of a home's value a bank may finance, so even a very high salary cannot get you 95% funding. The gap is your down payment, and it has to come from your own savings. Understanding both tests before you shortlist a home saves the disappointment of a sanction letter that is smaller than the booking amount you already paid.

RBI loan-to-value limits

These are ceilings, not entitlements — individual banks often lend less, and the "value" they use is their own valuation or the agreement value, whichever is lower. Stamp duty, registration and GST are normally excluded from the financed value, so budget for them separately. See Reserve Bank of India for background on the regulator, and read the total cost of buying a flat so the down payment you plan is the real one.

An illustrative eligibility table

The figures below are computed at an illustrative interest rate of 8.5% per annum over 20 years, using the standard EMI formula, and assume you have no other EMIs running. They are rules of thumb for planning, not a bank's offer.

A useful shortcut: at 8.5% over 20 years, every ₹1 lakh of loan costs roughly ₹868 a month. Divide your comfortable EMI by 868 and you have your loan in lakhs. At a higher rate the same EMI buys a smaller loan, which is why a rate change of half a percent matters more than most buyers expect. EMI planning for a new flat works through the monthly side in detail.

What existing EMIs do to the number

Every running obligation comes straight off your capacity, and this is where most eligibility estimates go wrong. Suppose your take-home pay is ₹1 lakh and you pay ₹14,000 a month on a car loan. At a 50% FOIR your total EMI room is ₹50,000, so only ₹36,000 is left for the home loan — an indicative loan of about ₹41.5 lakh rather than ₹57.6 lakh. A ₹14,000 car EMI has therefore cost you roughly ₹16 lakh of home loan eligibility.

Credit-card outstanding amounts may also be counted by some lenders, often as a notional percentage of the balance, and a personal loan counts fully. The cheapest way to increase home loan eligibility is usually to close small, expensive loans three to six months before you apply, then let the closure reflect in your credit report.

Credit score, age and employment type

• Credit score. Most lenders price home loans by credit risk, so a strong score can mean both approval and a better rate. Check your report before applying and get errors corrected — a settled loan showing as outstanding can cost you the sanction.
• Age and tenure. Banks generally want the loan to close by retirement, around 60 for salaried and later for self-employed. A 30-year-old can get 30 years; a 48-year-old may be offered 12–15, which raises the EMI and lowers the eligible loan for the same income.
• Employment type. Salaried applicants are assessed on salary slips, Form 16 and bank statements. Self-employed applicants are assessed on two or three years of ITRs and financials, using income after expenses and tax — which is often lower than what they consider their earnings.
• Variable pay. Bonuses and incentives may be counted partly, or averaged over two years. If much of your income is variable, keep your loan request below the maximum.
• Property and title. Even with perfect income, the bank must be comfortable with the project and its approvals, which is why buyers check how to verify a UP RERA project early.

How a co-applicant changes everything

Adding an earning co-applicant is the single most effective way to raise home loan eligibility, because banks add the eligible incomes of all co-borrowers and then deduct each person's existing EMIs. A couple taking home ₹70,000 and ₹55,000 is assessed on ₹1.25 lakh, which points to an indicative loan of about ₹72 lakh at a 50% FOIR on the illustrative assumptions above — far beyond what either could borrow alone.

Two practical points. First, a co-applicant who is also a co-owner may claim tax deductions in their own right under the old regime — Section 80C on principal up to ₹1.5 lakh and Section 24(b) on interest up to ₹2 lakh for a self-occupied home; check current rules with a tax advisor. Second, the liability is joint, so both credit histories matter and a default affects both. Read joint ownership benefits before you decide whose name goes on the agreement.

Get the number confirmed, not estimated

Tables like the one above are for shortlisting. Before you book, convert the estimate into something a bank has signed.

1. Pull your credit report and fix errors.
2. Keep three months of salary slips, six months of bank statements, Form 16 or ITRs, and KYC documents ready — the full list is in the home loan documents checklist.
3. Ask two or three lenders for their FOIR policy and rate, not just the rate.
4. Get a pre-approval, which states the amount a bank will actually lend and speeds up booking: home loan pre-approval benefits.
5. Confirm whether the lender has already funded homes in the project, which usually makes the file faster.

If you are buying from outside India, the income assessment and documentation differ — see NRI buying a flat in Greater Noida West.

Match your eligibility to a real home

Eligibility only becomes useful when it is placed against an actual cost sheet. At Sorrel Heights, Novelty Green, Jalpura, Greater Noida West, the 2BHK + Study of 1280 sq.ft is indicatively priced under ₹50 lakh all-inclusive, the 3BHK homes of 1700–1750 sq.ft indicatively ₹60–70 lakh, and the duplex homes with open terrace indicatively under ₹1 crore. All prices are approximate, shared by Sorrel Buildcon and revised from time to time.

Remember the LTV test when you compare: a home in the ₹60–70 lakh band generally supports a loan of about 80% of the value, with the balance plus stamp duty, registration and GST from your own funds. Ask for the current cost sheet on price list & payment plan, see the payment options in the buying process, compare the floor plans, and book a site visit — the team can also point you to lenders who fund the project.

Credit score basics

Lenders prefer strong credit histories. Pay every EMI and card bill on time, keep card use well below the limit and avoid many loan enquiries in a short period before applying. Check your credit report for errors a few months ahead.

Tenure and age

Longer tenures lower the EMI but raise total interest. Lenders usually want the loan closed before retirement age, so older applicants may get shorter tenures. Adding a younger co-applicant can help.

A quick self-check

List your take-home income, current EMIs and monthly savings. If the new EMI plus existing EMIs leaves little room for saving, consider a smaller home or a larger down payment. Compare the 2BHK + Study and 3BHK costs on price list & payment plan.

Facts about Sorrel Heights on this page come from the official brochure and Sorrel Buildcon. General guidance is for information only — confirm rules and rates with the relevant authority before you act.