12 June 2026 · 4 min read
What is FOIR and How It Affects Your Home Loan Eligibility
FOIR (Fixed Obligation to Income Ratio) is the single biggest factor banks use to decide your loan amount. Understand it and you can plan your eligibility before you even apply.
What FOIR means
FOIR stands for Fixed Obligation to Income Ratio. It is the percentage of your monthly income that goes toward fixed loan repayments — home loan EMI, car loan EMI, personal loan EMI, and credit card minimum dues. Banks set a ceiling on this percentage to make sure you are not over-leveraged.
The formula is simple:
If your net take-home is ₹60,000 and you already pay ₹15,000 in EMIs, your current FOIR is 25%. Banks typically allow a maximum FOIR of 40–50%, which means the remaining capacity for a new home loan EMI is roughly ₹9,000–₹15,000 per month.
Why FOIR matters more than your salary
Two people can earn the same salary but get very different loan amounts. Someone with zero existing debt and a salary of ₹50,000 can get ₹35 lakh. Someone with the same salary but ₹15,000 in existing EMIs may only qualify for ₹18–20 lakh. FOIR is the reason.
FOIR limits by lender type
| Lender type | Max FOIR allowed | Notes |
|---|---|---|
| Public sector banks (SBI, Bank of Baroda) | 40–45% | Conservative, stricter underwriting |
| Private banks (HDFC, ICICI, Kotak) | 45–55% | More flexible for high earners |
| Housing finance companies (LIC HFL, PNB HFL) | 50–60% | Higher FOIR tolerance |
| NBFCs (Bajaj Housing, Aditya Birla) | 55–65% | Most flexible, higher rates |
What counts as a fixed obligation?
- Home loan EMI (existing, if any)
- Car loan EMI
- Personal loan EMI
- Education loan EMI
- Credit card minimum due (typically 5% of outstanding balance)
- Any other EMI-based obligation
What does NOT count: rent, insurance premiums, SIPs, or discretionary expenses. Banks only include fixed monthly debt obligations.
FOIR calculation example
| Item | Amount |
|---|---|
| Net monthly salary | ₹70,000 |
| Existing car loan EMI | ₹8,000 |
| Credit card minimum due | ₹2,000 |
| Total existing obligations | ₹10,000 |
| Current FOIR | 14.3% |
| Bank's max FOIR (45%) | ₹31,500 |
| Available EMI for home loan | ₹21,500 |
| Eligible loan at 8.5% / 25 yr | ~₹27 lakh |
How to improve your FOIR before applying
- Prepay or close small loans — clearing a ₹5,000/month personal loan EMI can increase your home loan eligibility by ₹5–6 lakh.
- Pay down credit card balances before applying to reduce minimum dues.
- Avoid taking any new loans or credit cards in the 6 months before your home loan application.
- If your employer gives you a salary hike or incentive, apply after it reflects in your payslip.
- Add a co-applicant to increase combined income and reduce the FOIR burden.
Different banks calculate net income differently. Some use gross salary; others use CTC minus deductions. The EMI Analyzer tool reads your actual payslip deductions and calculates FOIR the same way your bank will — giving you an accurate picture before you apply.
FOIR vs LTV — the two limits
FOIR limits how much EMI you can afford. LTV (Loan to Value) limits how much of the property value the bank will fund — typically 75–90%. Your actual loan amount is the lower of the two limits. A high-earning borrower may hit the LTV cap before hitting the FOIR cap on an expensive property.
Summary
FOIR is the most important number in your home loan application. Keep your existing obligations low, maintain a 750+ credit score, and apply when your FOIR is well below 40%. That is when banks compete to give you the best rate.
Find out your exact eligibility
Upload your payslip and get your home loan limit in seconds. Free, instant, no login.
Check my eligibility →