How to use this Understanding the FOIR Banking Algorithm calculator
Banks do not grant you loans just because you have 'a good salary'. They strictly utilize the Fixed Obligation to Income Ratio (FOIR). Most banks strictly cap FOIR at 50%. This means all your monthly EMIs combined absolutely cannot exceed 50% of your take-home pay.
Key Calculation Assumptions
- Calculations assume fixed compounding frequencies unless custom compounding is selected.
- Results do not factor in unannounced statutory tax rate adjustments or customized bank penalty fees.
- Calculations serve educational decision-making and planning purposes.
Frequently Asked Questions (FAQs)
How does Existing EMI wreck eligibility?
If your salary is ₹100,000, your absolute max FOIR cap is ₹50,000. If you already have a ₹30,000 car loan EMI running, the bank will brutally restrict your new home loan buffer to a maximum of just ₹20,000/month.
How does the Co-Applicant Engine work?
When you add a spouse or working parent, the bank merges your two salaries into a massive new FOIR pool. An individual capped at a ₹50L loan can suddenly jump to a ₹95L loan without lifting a finger.
Does a longer tenure increase eligibility?
Yes. By pushing the tenure from 10 years to 30 years, the monthly math EMI drops substantially. Since the EMI gets smaller, it fits deeper inside your 50% FOIR cap, allowing the system to grant you a massive bump in principal.