Home Affordability Calculator
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Quick Summary
- Find the maximum home price you can afford based on income, expenses, existing EMIs and down payment, using the RBI's 40% EMI guideline. Free tool.
- For example, Take-home ₹1 lakh/month, no existing EMI works out to Affordable EMI ≈ ₹40,000/month.
- Built for prospective home buyers checking the maximum home price their income and savings can support
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How this is calculated
Max EMI = 40% of monthly income − existing EMIs (RBI guideline: total EMIs ≤ 40–50% of income). Max Loan = derived from max EMI at your rate and tenure. Home Price = Max Loan + Down Payment.
How the Home Affordability Calculator Works
Based on the RBI-guided FOIR rule (your total EMIs shouldn't exceed ~40% of take-home pay), the calculator finds your maximum affordable EMI, converts that into a maximum loan amount at your chosen interest rate and tenure, then adds your down payment to give the total home price you can afford.
Example Scenarios
| Scenario | Result |
|---|---|
| Take-home ₹1 lakh/month, no existing EMI | Affordable EMI ≈ ₹40,000/month |
| Take-home ₹1.5 lakh/month, ₹15,000 existing EMI | Affordable new EMI ≈ ₹45,000/month |
| Take-home ₹2 lakh/month, 20% down payment ready | Higher loan eligibility + lower EMI burden |
* Illustrative estimates assuming constant annual returns. Actual results vary with market conditions.
Frequently Asked Questions
Most Indian banks apply the RBI-guided rule that total EMIs (including the new home loan) should not exceed 40% of your monthly take-home income (FOIR — Fixed Obligation to Income Ratio), though some lenders extend up to 50-60% for higher-income borrowers.
It's calculated by working backward from your affordable EMI (40% of income minus existing EMIs), the loan tenure, and the current interest rate to find the maximum loan eligible, then adding your available down payment to get the total affordable home price.
No — keep at least 6 months of expenses as an emergency fund before allocating savings to a down payment. A larger down payment reduces EMI and total interest, but liquidity for emergencies should not be sacrificed entirely.
Common Mistakes to Avoid
- Stretching to the maximum EMI the bank approves rather than what's comfortably affordable after all expenses.
- Using all available savings for the down payment and leaving no emergency fund.
- Ignoring rising interest rates on floating-rate loans when estimating long-term affordability.
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* Calculations assume constant annual returns. Actual mutual fund returns vary. Past performance is not indicative of future results. FD comparison uses 7% p.a. SIP returns are compounded monthly.
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