Home loan eligibility: how much a bank will lend you for a new flat

3.10.1 How do banks decide your home loan eligibility?

A bank decides your home loan eligibility from your repaying capacity, and then checks the result against the RBI loan-to-value cap. The two limits work separately, and you get the lower one. Bank of Baroda’s home loan page says the loan amount “is determined on the basis of the repaying capacity of the applicant/s”. It lists the factors as age, income, dependents, assets, liabilities, stability of occupation, continuity of income and savings. HDFC Bank’s page names a similar list: income and repayment capacity, age, financial profile, credit history, credit score and existing debt or EMIs. The share of income that a lender lets your EMIs take is the lender’s own credit policy. The RBI Directions that Sachi read do not fix that share. So two banks can offer you different amounts on the same salary. For a new flat in Bangalore, get a written figure from the lender before you book, and build your budget from it.

Use these steps to estimate your own eligibility before you talk to a lender.

1. List the monthly income of each applicant whose income the lender will count.
2. Subtract every existing EMI, including car, personal and card loans.
3. Ask the lender for the share of income it allows for EMIs, and apply it.
4. Convert the EMI that is left into a loan amount at the lender’s rate and tenure.
5. Check that loan against the RBI loan-to-value cap for the flat’s cost.
6. Take the lower of the two figures as your eligibility.

Factor	What the lender looks at	Source
Income and repaying capacity	Salary or business income, existing EMIs	Bank of Baroda FAQ and HDFC Bank FAQ
Age and tenure	Applicant age 21 to 70, tenure up to 30 years (Bank of Baroda). Age 21 to 60 salaried, 21 to 65 self-employed (HDFC Bank)	Each bank’s eligibility section
Minimum income	₹25,000 a month salaried, ₹3 lakh a year self-employed (HDFC Bank FAQ table). The same page’s embedded FAQ data shows other figures (age 21 to 65 for both, ₹10,000 and ₹2 lakh), so confirm with the bank	HDFC Bank FAQ
Credit history and score	Repayment record with credit bureaus	HDFC Bank FAQ and Bank of Baroda rates tab
Property cost	Loan-to-value cap	RBI Credit Facilities Directions, 2025, paragraph 111

Bank of Baroda’s page gives two age limits. The eligibility tab lists a maximum age of 70 years. Its FAQ says the term cannot run past retirement or age 65, whichever is earlier. Ask the bank which limit applies to you.

3.10.2 How much of the flat’s price can a bank lend under RBI rules?

For a commercial bank, RBI caps the home loan at 90, 80 or 75 percent of the flat’s cost, depending on the loan amount. Paragraph 111 of the RBI (Commercial Banks - Credit Facilities) Directions, 2025 sets these loan-to-value (LTV) ratios. Paragraph 4(1)(xxiia) defines LTV as the ratio of the outstanding loan to the value of the securities. For an individual housing loan up to ₹30 lakh, the LTV can be up to 90 percent. Above ₹30 lakh and up to ₹75 lakh, it can be up to 80 percent. Above ₹75 lakh, it can be up to 75 percent. Paragraph 113 tells banks not to include stamp duty, registration and other documentation charges in the property cost. The exception is a house or dwelling unit that costs ₹10 lakh or less. So you pay the rest of the flat’s cost, plus stamp duty and registration, from your own money. Sachi read the version updated as on 1 October 2026.

Loan amount	Maximum LTV (RBI, commercial banks)	Your minimum share of the flat’s cost
Up to ₹30 lakh	90 percent	10 percent
Above ₹30 lakh, up to ₹75 lakh	80 percent	20 percent
Above ₹75 lakh	75 percent	25 percent

Source: RBI (Commercial Banks - Credit Facilities) Directions, 2025, paragraph 111, checked 11 October 2026. A cap is a maximum. A lender can lend less. Housing finance companies follow separate RBI Directions, and Sachi did not check their LTV rules for this guide. If your lender is a housing finance company, ask it for its LTV limit in writing.

For an under-construction flat, the bank does not pay the whole loan at once. Paragraphs 116 and 117 link disbursal to the stages of construction. The construction-linked payment plan guide explains how each demand works.

3.10.3 How do you work out how much loan your income supports?

You work it out backwards from the EMI you can pay, using the standard EMI formula. The home loan EMI calculator guide gives the formula: EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1). Rearranged, the loan P = EMI × ((1 + r)^n − 1) ÷ (r × (1 + r)^n). Here r is the annual rate ÷ 12 ÷ 100, and n is the number of months. Take a buyer who can pay ₹60,000 a month as an EMI after all other loans. At an illustrative 8.5 percent for 20 years, that EMI supports a loan of about ₹69.1 lakh. A ₹69.1 lakh loan falls in the ₹30 lakh to ₹75 lakh band, so the bank’s LTV cap is 80 percent. The loan can then cover a flat cost of up to about ₹86.4 lakh, before stamp duty and registration. The 8.5 percent rate is an illustration, not a current market rate.

Scenario (illustrative 8.5 percent)	EMI available	Tenure	Loan it supports	LTV band	Highest flat cost at the cap
A: no other loans	₹60,000	20 years	about ₹69.1 lakh	80 percent	about ₹86.4 lakh
B: same buyer, longer tenure	₹60,000	25 years	about ₹74.5 lakh	80 percent	about ₹93.1 lakh
C: a ₹15,000 car EMI already runs	₹45,000	20 years	about ₹51.9 lakh	80 percent	about ₹64.8 lakh

Source: Sachi calculation with the standard EMI formula, 11 October 2026. The figures are rounded. The EMI available is the buyer’s own limit, not a bank rule.

Scenario C shows the effect of one existing loan. A ₹15,000 EMI cuts the loan by about ₹17.3 lakh. A longer tenure raises the loan, but it raises total interest too. The home loan interest rates guide explains how the rate can change after you sign. Test your EMI at a rate 1 percentage point higher before you fix your budget.

3.10.4 What role does your CIBIL score play in home loan eligibility?

Your CIBIL score is one of the inputs that a lender uses to decide whether to lend, and at what rate. A CIBIL score is a credit score that summarises your past repayment record. Bank of Baroda’s FAQ says the score is provided by CIBIL, not by the bank. HDFC Bank’s home loan page lists “Credit History” and “Credit Score” among the factors for eligibility. It also tells applicants not to ignore the CIBIL score, because the score has an impact on the application. Bank of Baroda’s rates tab says the rate of interest “is dependent upon Loan limit and CIBIL Score of the applicant/s”. Its floating rates for salaried borrowers ran from 7.20 to 8.95 percent on 11 October 2026. The RBI Credit Facilities Directions, 2025 set no minimum credit score for a home loan. Neither bank page that Sachi checked states a minimum score. So ask your lender for its minimum score and its rate bands in writing.

Two RBI points matter for a new-flat buyer. First, paragraph 115 of the Credit Facilities Directions, 2025 warns about builder-serviced schemes. If a builder delays the interest it pays for you, your credit score can fall. Second, the score belongs to each applicant. A co-applicant’s poor record can affect a joint loan.

Credit score question	Answer	Source
Is there an RBI minimum score?	None in the Credit Facilities Directions	RBI Credit Facilities Directions, 2025 (none found)
Does the score change the rate?	Yes, at Bank of Baroda	Bank of Baroda rates tab
Can a builder’s late payment hurt my score?	Yes, under a builder-serviced scheme	RBI Credit Facilities Directions, 2025, paragraph 115

3.10.5 What documents do banks ask for a home loan?

Banks ask for three sets of documents: your identity and address, your income, and the property papers. Bank of Baroda’s published home loan checklist shows a typical list for a resident Indian. All documents must be self-attested by the applicant, co-applicant or guarantor. PAN is mandatory for a loan application above ₹10 lakh. A salaried applicant gives the latest 3 months’ salary slips and 6 months’ bank statements. The applicant also gives Form 16 and the income tax return for the last 1 year. A self-employed applicant gives the balance sheet, profit and loss account and income tax returns for the last 2 years. For a new flat, the property list includes the agreement for sale and the approved plan. It also includes the builder’s registered development agreement and all payment receipts. The bank also gets a title clearance report from its advocate and a valuation report from its valuer. Other banks use similar lists. Ask your lender for its own checklist.

Group	Bank of Baroda checklist items (resident Indian)
Identity and address	Application form with 3 photographs, PAN, one of driver’s licence, voter ID, passport or Aadhaar, proof of residence
Existing loans and assets	Statement of any earlier loan for the last 1 year with its sanction letter, proof of assets, assets and liabilities statement, ITR verification report
Salaried income	Latest 3 months’ salary slips, Form 16 and ITR for the last 1 year, employer ID card, appointment or confirmation letter, 6 months’ bank statement
Self-employed income	Balance sheet, profit and loss account and computation of income for 2 years, ITRs for 2 years, 26AS, business proof
New flat from a builder	Agreement for sale, approved plan, commencement certificate if applicable, builder’s registered development agreement if applicable, all payment receipts
Bank’s own checks	Title clearance report from an approved advocate, valuation report from the bank’s approved valuer

Source: Bank of Baroda, Check List for Home Loan (PDF), checked 11 October 2026. The PDF says property documents can vary from state to state. For a resale flat, the checklist adds older items, such as the chain of earlier agreements and the latest property tax receipt. NRI, PIO and OCI applicants have a separate list in section B.

Sachi tracks K-RERA records for Bangalore projects. To check a project’s registration before you share documents with a lender, Ask Sachi.