FOIR (Fixed-Obligation-to-Income Ratio)
FOIR is the share of your net monthly income already committed to EMIs and other fixed obligations. Lenders cap it — often around 50–60% — to decide how much more you can safely borrow.
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Lenders won’t let your EMIs swallow your entire pay-cheque. Before sanctioning a loan they work out your FOIR — the proportion of your net monthly income that already goes to fixed commitments like existing loan EMIs, credit-card minimums and rent (where counted). Whatever headroom is left below their cap is what they’ll lend against.
Most lenders keep total obligations within roughly 50–60% of net income, with the exact band depending on your income level and profile — higher earners are often allowed a higher ratio because more is left over after essentials. Any EMI you already pay eats directly into that headroom, which is why clearing a small loan before applying can noticeably raise the amount you qualify for.
Worked example. Suppose you take home ₹1,00,000 a month with no other EMIs. A 50% FOIR cap leaves about ₹50,000 a month available for a new EMI. At 8.5% over 20 years, that EMI supports a home loan of roughly ₹57,61,542. Add an existing ₹15,000 car EMI and your available EMI drops to ₹35,000 — and the loan you qualify for falls with it.
FOIR is only one of the two limits on your loan: the lender also caps the loan as a fraction of the property value (see LTV). Your final sanction is the lower of the two. To see how income translates into a loan amount, read how much home loan you can get on your salary.