The bank telling you that you're "eligible" for a ₹80 lakh home loan is not the same as that loan being affordable. Eligibility is a lending decision; affordability is whether you can actually live comfortably while paying it off.
The 28/36 rule
A widely used guideline: your home EMI shouldn't exceed 28% of gross monthly income (front-end ratio), and all debt payments combined — home EMI plus every other loan — shouldn't exceed 36% (back-end ratio). Banks will often approve you well past these numbers; that doesn't mean you should accept it.
What your EMI doesn't include
The EMI is the headline number, but the real monthly housing cost adds:
- Property tax — typically 0.5–2% of property value annually, billed monthly it adds up
- Home insurance — often required by the lender, a few thousand rupees a year
- Maintenance and society charges — can run ₹2,000–₹10,000+ monthly in apartments
- Repairs — a rule of thumb is budgeting 1% of home value per year
Add these up before deciding your comfortable EMI ceiling — they can add 15–20% on top of the EMI alone.
Down payment: more than just skin in the game
A larger down payment doesn't just reduce your loan amount linearly — it disproportionately reduces total interest paid, since you're borrowing less for the entire tenure. Going from 10% to 20% down on a ₹60 lakh home can cut total interest paid by several lakhs over 20 years, not just the interest on that extra 10%.
Interest rate: the number that moves the most
A 1 percentage point rate difference on a 20-year home loan changes the EMI by roughly 6–7% — more than most people expect. It's worth negotiating, checking your existing bank relationship for preferential rates, and comparing at least 3 lenders before signing.
See your real numbers
Plug in your income, existing debt, down payment, and rate into our Home Affordability Calculator to get your maximum comfortable home price, full EMI breakdown, and both front-end and back-end DTI — not just what a bank says you're "eligible" for.