"How much loan will the bank give me?" is the wrong first question. It answers what a lender is willing to risk, not what you can live with. Three separate limits cap the price of the home you can buy, and the lowest of them is your real budget.
An illustrative household
Take a household on a ₹25 lakh salary, which is about ₹2.08 lakh a month before tax. Assume ₹1.6 lakh reaches the account each month, ₹55,000 goes on essentials and ₹25,000 is saved. These are illustrative numbers; use your own payslip and expenses.
Limit 1: what a lender may lend
Lenders set their own limits on repayments as a share of income. SBI's page for loans against property lists limits of 50%, 55% and 60% of net income, rising with income; standard home loans have no equivalent national rule, so treat any figure as lender-specific.
In our illustration, at a 50% limit on gross monthly income, 9% interest and 20 years, the lender's limit is a loan of about ₹1.16 crore. Because RBI caps the share of the price a lender may finance, we assume a 75% loan, which gives a price of about ₹1.54 crore.
Limit 2: what you can live with
Your comfortable EMI is the lower of two numbers. In our worked example, ₹80,000 is left after essentials and saving. If take-home fell by a fifth, ₹73,000 would be left after essentials with saving paused. So the comfortable EMI is ₹73,000, which supports a loan of about ₹81 lakh and a price of about ₹1.08 crore. That EMI survives a 20% income drop by construction.
Limit 3: what your savings can pay for
The loan funds only part of the purchase. The down payment, stamp duty and registration, and a six-month reserve come from savings. For the ₹1.08 crore flat, in our model that is about ₹42.3 lakh: ₹27 lakh down, ₹7.6 lakh in stamp duty and registration, and ₹7.7 lakh in reserve.
In our example, if the household has ₹25 lakh saved, it can fund a purchase of about ₹54 lakh, even though income supports twice that.
Illustration (model guides@1): ₹25 lakh salary, ₹1.6 lakh monthly take-home, ₹55,000 essentials, ₹25,000 saved each month; 9% over 20 years, 75% loan, 7% stamp duty, six-month reserve. The lowest bar is the one that binds. Illustration — inputs are stated in the text.
What this changes
- The lowest limit is your budget. Here it is cash, not income. The fix is not a bigger loan; it is a smaller flat, a longer wait to save, or a lower-priced city.
- A lender's figure is a ceiling, not a target. Spending up to it leaves no room for the shocks the comfortable limit allows for.
- Area per rupee differs a lot by city. At Noida's median asking price of ₹11,010 per sq ft, as listed, a ₹1.08 crore budget buys about 983 sq ft; at Gurgaon's ₹14,318 it buys about 756 sq ft. Listed areas may be carpet or super built-up, so confirm the basis in writing.
For a different salary, our ₹40 LPA worked example shows three households side by side, and the FOIR guide explains how lenders count existing EMIs.
To test your own numbers, use the free home affordability calculator.
Common questions
How much home loan can I get on a ₹25 lakh salary?
In our worked example, a lender working to a 50% limit on gross monthly income might offer a loan of about ₹1.16 crore. That is the most a lender may be willing to lend, not what you can comfortably repay. Lenders set their own limits, so your own bank's figure may differ.
Why is my comfortable budget lower than my loan eligibility?
Eligibility looks only at income and existing EMIs. A comfortable budget also needs room for expenses, saving and an income dip. In our example the comfortable EMI is the lower of what is left after essentials and savings, and what is left if take-home falls by a fifth.
Can savings limit how much I can buy?
Yes, and often first. The down payment, stamp duty and registration, and a reserve all come from savings, not the loan. In our example ₹25 lakh of savings supported a flat of about ₹54 lakh, even though the income supported ₹1.08 crore.
Sources
- Loans against property: eligibility and maximum permissible EMI/NMI — State Bank of India, updated 20 September 2025
- Master Circular – Housing Finance (LTV ratios and exclusion of stamp duty) — Reserve Bank of India, 1 April 2022
- Gulmohar Atlas: residential sale and rental listings, five cities — Gulmohar, October 2026
Figures labelled “illustration” are worked examples with the inputs stated in the article, not market data. Spotted an error? Write to hello@gulmohar.ai and we will correct it.