Loan Eligibility Calculator
Calculate the maximum eligible home loan amount from monthly income, existing EMIs, FOIR ratio, interest rate, and tenure.
How this works
Lenders cap the share of your monthly income that can go toward all EMIs combined — the FOIR (Fixed Obligations to Income Ratio). The headroom available for a new EMI is:
availableEmi = max(0, monthlyIncome × foirPct/100 − existingEmi)The maximum loan principal that EMI can amortise is then derived from the inverse EMI formula:
if rate = 0: maxLoan = availableEmi × months
else: maxLoan = availableEmi × ((1+r)^n − 1) / (r × (1+r)^n)
where r = ratePct/12/100, n = monthsThe output is the upper bound — your actual sanction will be lower after the lender layers on credit-score, age, employment-stability, and Loan-to-Value haircuts.
Worked example
Salaried borrower with monthly income NPR 1,00,000, existing EMI of NPR 0, FOIR cap 50%, interest rate 9.5% per annum, tenure 240 months (20 years):
- Available EMI =
0.50 × 1,00,000 − 0= NPR 50,000 - Monthly rate
r = 9.5 / 12 / 100 ≈ 0.00792 - Maximum loan ≈ NPR 53,64,000
Add an existing EMI of NPR 8,000 and the eligibility drops to roughly NPR 45,06,000 — an existing personal or vehicle loan eats directly into your home-loan capacity.
Sources
- Standard FOIR-based loan eligibility (RBI / NRB underwriting practice)
FAQ
What is FOIR and how does it cap my loan eligibility?
FOIR stands for Fixed Obligations to Income Ratio. Lenders cap the share of your monthly income that can go toward all EMIs combined — typical limits are 40% to 55% in Nepal and India, 50% being the most common. If your monthly income is NPR 1,00,000 and your existing EMIs are NPR 8,000, a 50% FOIR allows a new EMI of (50% × 1,00,000) − 8,000 = NPR 42,000. The maximum loan is whatever principal that EMI can amortise at the quoted rate and tenure.
How is the maximum loan amount derived from the available EMI?
We invert the standard EMI formula. With a monthly rate r = ratePct/12/100 and tenure n months, the maximum principal is availableEmi × ((1+r)^n − 1) / (r × (1+r)^n). For an interest-free loan (rate 0%) it simplifies to availableEmi × n. The result is the upper bound — your actual sanction will be lower after the lender applies their own credit-score, age, and property-value haircuts.
What FOIR percentage should I assume?
Most banks set 50% as the default for salaried applicants, with steps up to 55% or 60% for high-income borrowers and steps down to 40% for self-employed or older applicants. Use 40% to 50% for a conservative estimate. Going above 55% leaves very little buffer for lifestyle expenses and is the most common reason for stretched households defaulting in the first downturn.
Why does a longer tenure mean a higher eligibility?
A longer tenure spreads the same principal over more months, which lowers each EMI. Since the lender caps your EMI (not your principal), a lower per-month commitment lets the same income service a larger loan. Tenure 240 months at 9.5% supports roughly NPR 45 lakh per NPR 42,000 EMI, while tenure 360 months at the same rate supports about NPR 50 lakh — but you also pay a lot more interest over the longer life.
Should I include rental income or bonuses in monthly income?
Lenders generally include 50% to 70% of documented rental income, 50% of variable bonuses (averaged over two years), and 100% of base salary. Self-employed applicants are typically assessed on the average of the last two or three years' net profit after tax. Use the most conservative figure that you can document to avoid an over-estimate that won't survive underwriting.
Does this calculator account for the property value?
No — this is an income-based eligibility check (FOIR). Lenders also apply a Loan-to-Value cap (typically 75% to 90% of the property value). Your final sanction is the minimum of the FOIR-based maximum (this calculator) and the LTV-based maximum (property value × LTV). Run both checks and use the smaller figure.