The real estate prices have corrected at least 15-20 % in 2020. The rate of interest at the same time bottomed down to 6.8% p.a, which is the lowest ever in the last two decades. Clearly, an opportunity for anyone who wants to buy a home or commercial property for self use!
Let’s do the mathematics involved and find out how much Home Loan can you get on your salary. While the exact eligibility for Home Loan amount will vary across the lenders, we can still estimate the approximate quantum you can avail of for materializing your dream home purchase.
It is also important to know here that in-hand salary is not the only parameter to calculate the home loan amount. Your age, credit score, EMI to NMI ratio are some of the other factors which will also impact your eligibility for Home Loan.
Herein NMI is considered as monthly take-home pay calculated after deducting taxes and deductions. The borrower can also include a co-borrower, especially spouse or other biological relatives to increase the eligibility amount for loan.
Besides each lender has a credit policy of maximum LTV of property to lend as a loan.
For example, if you want SBI Home Loan, the lender has parameter as below:
You can borrow up to 90% of the value of the property but only for small-ticket Home Loans up to Rs 30 Lakh.
SBI grants max LTV of 90% for lower than Rs.30 Lakh loan amounts, 80% for loans between Rs 30 Lakh to Rs.75 Lakh and 75% for above Rs.75 Lakh loans respectively.
Now let’s take a snap shot on eligibility of Home Loan basis different salary brackets. We have used a Home Loan Calculator to make these estimates.
Table: Home Loan Eligibility according to Monthly Income
Monthly Income (in Rs) | Max Home Loan Amount Eligibility (in Rs) | EMI; Tenor- 30 Years & ROI 6.9% p.a (in Rs) |
25,000 | 15,18,372 | 10,000 |
50,000 | 34,16,337 | 22, 500 |
75,000 | 56,93,895 | 37,500 |
1,00,000 | 75,91,860 | 50,000 |
1,25,000 | 1,04,38,807 | 68,750 |
*The calculations are only for representative purpose. For exact valuation, do check the latest Home Loan Interest Rates and offers.
You can also use Home Loan EMI Calculator to assess the loan cost before contacting the lender.
Herein also note that, the loan eligibility amount will change as you change the tenor. The rate of interest will be assessed as per your profile. So make sure you also work on all the factors that strengthen your Home Loan application.
The lender will basically assess your present age and working years before retirement as a parameter to gauge your repayment capacity and offer tenor accordingly. The maximum Home Loan tenure offered is 30 years for both salaried as well as self employed. If you apply for loan after 35 years of age, you may not be eligible for total 30 year loan.
However, it is also not recommended to opt for max tenure loan. You should try to repay your loan as soon as possible. This also saves enough on interest cost.
Generally Home Loan age criteria for Salaried Individuals will be anywhere from 21 to 60 years (or till retirement) to 23 to 65 years.
To factor in Home Loan Eligibility your monthly net income is assessed. There are 100+ Home Loan lenders and you can find a suitable offer if you meet following minimum income criteria:
Salaried Individuals: Rs 10,000 per month
Self Employed individuals: Rs 2 Lakh annually
Herein, please note that these are minimum thresholds. For greater loan amounts, you would be expected to support greater income.
There are multiple factors that affect assessment of your financial health. The lender will consider your present income as well as your future income possibility basis your qualifications and nature of work.
Next, they will also consider your past and present credit History. Your Credit Score will be the primary assessment factor. If you have successfully repaid your Credit Card statements month-on-month or have served a loan successfully, your application will be preferred and you will be treated as a responsible borrower.
The loan EMIs should be less than 50 % of one’s take-home monthly income. So the lender will ask you about your current financial obligations. In case you have existing Car Loan or Personal Loan, Credit Card outstanding, etc, your eligibility will fall.
Keeping all these factors in mind, you can ensure the desired loan amount for your profile. It is recommended to use professional advice and Home Loan Eligibility Calculator before applying for a Home Loan. You should apply only when you are sure about your fitment for the lender’s offer.
To use the calculator all you need to do is feed in your net income, rate of interest and tenure and you will get loan amount and EMI estimate instantly, free of cost. This way you can prepare for a Home Loan much in advance.
Home Loans are long term commitments. You can enhance eligibility for Home Loan Quantum by employing some of these tricks:
Also Read: How does Your Salary Impact the Home Loan Eligibility?
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 100+ Banks and NBFCs. We have served 7 million+ happy customers since 1989.