Home Affordability Calculator — What Price Range Can You Actually Buy In?
Find out how much home you can afford based on your income, debts, and down payment. Avoid overbuying and financial strain.
Real estate agents will cheerfully show you properties 40% above your comfortable budget. It's not necessarily malicious — they often don't know your full financial picture. But you do, and the CalcHub Home Affordability Calculator helps you set your own ceiling before the house-hunting emotions kick in.
Two Ways to Think About Affordability
There's the bank's version and yours. They're different.
The bank's version: What's the maximum loan they'll approve? This is based on income, credit score, and existing liabilities. Banks in India typically lend up to 4-5x annual income. Your version: What loan payment keeps you comfortable — able to invest, handle emergencies, and not feel stretched every month? This is usually a lower number, and it's the one that matters for your quality of life.The affordability calculator helps you figure out your number, not the bank's maximum.
Key Inputs
- Monthly gross income — pre-tax household income if two earners
- Monthly existing EMIs — car loan, personal loan, existing credit obligations
- Available down payment — savings earmarked for this purchase
- Loan tenure preference — 15, 20, or 30 years
- Interest rate — current home loan rates (typically 8-9%)
- Calculate — see maximum affordable home price and EMI range
The 28/36 Rule (Adapted for India)
In personal finance, the 28/36 rule suggests:
- Housing costs shouldn't exceed 28% of gross monthly income
- Total debt payments shouldn't exceed 36% of gross monthly income
India's reality is different — property prices relative to income are higher in metros — but the principle holds. If housing takes more than 35-40% of take-home pay, the squeeze on everything else becomes significant.
| Monthly Take-Home | Max Comfortable EMI (35%) | Approx. Loan Amount (8.5%, 20yr) |
|---|---|---|
| ₹60,000 | ₹21,000 | ~₹20,00,000 |
| ₹1,00,000 | ₹35,000 | ~₹33,00,000 |
| ₹1,50,000 | ₹52,500 | ~₹49,00,000 |
| ₹2,00,000 | ₹70,000 | ~₹66,00,000 |
What the Calculator Doesn't Know
Job security: A ₹1.5 lakh/month salary from a stable government job is very different from the same figure from a startup role or freelancing. Factor in your income stability honestly. Future expenses: Children's education, aging parents, potential career breaks — any of these can hit cash flow. Buy with some buffer rather than stretching to the maximum you can technically afford today. Maintenance costs: Old apartments can carry heavy maintenance charges. Older properties need periodic repair. Budget 1-2% of property value annually for upkeep.The Down Payment Reality
For a ₹60 lakh property:
- 20% down = ₹12 lakh down, ₹48 lakh loan
- 30% down = ₹18 lakh down, ₹42 lakh loan
The extra ₹6 lakh down payment reduces EMI by roughly ₹5,000/month and saves several lakh in interest over the loan's life. If you're close to crossing a 30% down threshold, it's often worth waiting another 6-12 months to save more.
Is it better to buy or rent?
The classic debate. In Indian metros, rental yields (rent as % of property value) are often just 2-3%. This means buying is expensive relative to renting. If you'll stay less than 5 years, renting is usually the better financial decision after accounting for transaction costs. Longer horizons favor buying in appreciating markets.
How does my credit score affect affordability?
Directly — through interest rates. A CIBIL score above 750 gets you the best rates (perhaps 8.4%); below 700 and lenders may charge 0.5-1% more, or reject the application. Check your score before applying. Each 0.5% difference in rate means real money over a 20-year loan.
Should both spouses be co-applicants?
Usually yes, for two reasons: combined income helps you qualify for a larger loan, and having a woman as first applicant often reduces stamp duty in several states. It also splits the tax benefits (Section 24 interest deduction) between two taxpayers.