How much will a bank actually lend you?
The two ratios that decide it, worked through with real numbers, and the things that quietly reduce the figure.
The short version
If you read nothing else.
- Your loan is the lower of two numbers: a share of the property value, and a multiple of what you can service monthly.
- Most lenders cap total EMIs at 40–50% of net monthly income. Existing loans and card minimums count against it.
- Loan-to-value is capped at 80% below ₹75 lakh and 75% above it. The rest is cash.
- A co-applicant with income raises the figure. A co-applicant without income does not.
The two ratios
Loan-to-value. On a ₹90 lakh property at 75%, the maximum loan is ₹67.5 lakh and you need ₹22.5 lakh in cash — before stamp duty and registration, which add another ₹7 lakh or so.
Fixed obligation to income. On ₹1.2 lakh net monthly income with a ₹12,000 car EMI, a lender working to 50% allows ₹60,000 of total EMI, leaving ₹48,000 for the home loan. At 8.5% over twenty years that supports roughly ₹55 lakh.
In that example the second number binds. The buyer can afford a ₹90 lakh property on paper and will be offered ₹55 lakh, not ₹67.5 lakh.
What quietly reduces it
- Credit card limits you do not use. Some lenders count a percentage of the limit rather than the balance.
- A short remaining working life. Tenure is capped at retirement, so a 50-year-old gets fifteen years where a 30-year-old gets thirty.
- Variable pay. Bonus and incentive income is often discounted or ignored entirely.
- A guarantee you gave someone else. It appears on your credit file and counts as an obligation.
Check your eligibility
Enter income and existing obligations and see both ratios worked out, rather than a single optimistic number.
What actually helps
Clearing a small loan before applying often raises eligibility by more than the loan was worth, because it removes the EMI from the calculation entirely. Adding an earning co-applicant is the single largest lever. Extending tenure raises the figure and raises the total cost considerably — use it to qualify, not to buy comfort.
Common questions
Does a low credit score stop me borrowing?
Below about 700 most banks decline and NBFCs price 150–300 basis points higher. It is usually worth spending six months repairing the score rather than accepting that rate for twenty years.
Is rent I currently pay counted?
No. Lenders assume the rent stops when you move into the property, which is generally true and occasionally not.