What the bank will actually lend
Two ceilings decide what a buyer can borrow and the lower one wins. Work out both before you show a single property, so nobody falls in love with something out of reach.
Your numbers
| Ceiling 1 — income (FOIR)Maximum EMI the income supports after existing obligations, converted to a loan amount. | — |
| Ceiling 2 — property (LTV)Maximum the lender will advance against this property's value. | — |
| EMI at the eligible amount | — |
| Monthly EMI headroom left | — |
| If existing EMIs were cleared, eligibility becomesOften the single most effective thing a stretched buyer can do. | — |
Buyers arrive with a budget that is really a down payment. Two separate ceilings decide what they can borrow, and the lower one wins.
LTV caps the loan at a percentage of the property's assessed value — not the price you agreed, which matters when a valuation comes in low. FOIR caps total EMI obligations at a share of net monthly income, and an existing car loan eats into it directly.
Run this in the first conversation. A buyer whose financing collapses two weeks before registry costs you a month, and most of those collapses were predictable at the first meeting.
How the two ceilings work
FOIR route. Maximum EMI = (net monthly income × FOIR%) − existing EMIs. Convert that EMI into a loan amount using the annuity factor for the rate and tenure, and you have the income ceiling.
LTV route. Loan ≤ property value × LTV%. Note that lenders use their own assessed value, which can come in below the agreed price — and the buyer funds that gap in cash.
The eligible loan is the lower of the two. Which one binds tells you what to do about it.
Worked example
Net income ₹1.5 lakh, existing EMIs ₹12,000, FOIR 50%. Maximum EMI is ₹75,000 − ₹12,000 = ₹63,000. At 8.5% over 20 years that supports a loan of roughly ₹72 lakh.
On an ₹80 lakh property at 80% LTV, the property ceiling is ₹64 lakh. So LTV binds, eligibility is ₹64 lakh, and the buyer needs ₹16 lakh down — before stamp duty.
Now clear the ₹12,000 car EMI. The income ceiling rises, but LTV still binds at ₹64 lakh — so in this case clearing it changes nothing, and telling the buyer that saves them a pointless decision. In the opposite case, where income binds, clearing existing EMIs is the single most effective move available to them.
The line to say out loud
Pre-approval is worth pushing for. An unapproved buyer is not a bad buyer — they are an unknown one, and you cannot price your own week around an unknown.
LTV bands, FOIR limits and rates vary by lender and change over time. Use this to frame the conversation, then send the buyer to a lender or advisor.
Questions
Why does an existing car loan reduce home loan eligibility so much?
Because FOIR caps total EMI obligations, not just the new one. Every rupee of existing EMI comes straight off the maximum home loan EMI, and at typical rates and tenures each ₹1,000 of EMI is worth roughly ₹1.1–1.2 lakh of loan.
What if the bank values the property below the agreed price?
LTV applies to the assessed value, so the loan drops and the buyer funds the difference in cash. It is one of the most common late-stage surprises — worth raising before an offer, not after.
Is pre-approval binding?
It is an in-principle sanction based on income documents, still conditional on the property passing legal and technical checks. Useful because it makes the income ceiling real; not a guarantee the specific deal will fund.
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