How to calculate mortgage loan eligibility?

Calculating mortgage (loan against property) eligibility is actually very straightforward if you understand the core logic banks use. They first decide how much EMI you can afford, and then convert that EMI into a loan amount using a formula. I have shared details on how to calculate mortgage loan eligibility below.

How can I Calculate Mortgage Loan Eligibility?

In simple terms, your eligibility depends on income, existing EMIs, interest rate, and loan tenure.

• The first step is to calculate your maximum affordable EMI. 

Most lenders allow you to use 40% to 50% of your monthly income for loan repayment.

For example, if your monthly income is Rs 50,000 and you already pay Rs 10,000 as EMI, then your usable income is Rs 40,000. Out of this, roughly 50% (Rs 20,000) can be considered as your maximum EMI capacity.

• The second step is to convert this EMI into loan eligibility using the standard formula:

Loan Amount (P) = EMI × [(1+r)^n – 1] / [r × (1+r)^n]

Here, r = monthly interest rate (annual rate ÷ 12) and n = loan tenure in months.

For example, if your EMI capacity is Rs 20,000, interest rate is 8% per year (0.00667 monthly), and tenure is 20 years (240 months), you can calculate your loan eligibility using this formula. The result will give you the maximum loan amount you can borrow.

• Another simple way (without a formula) is to use a practical rule:

Higher income + longer tenure = higher eligibility. Existing loans (EMIs) = lower eligibility

Banks also consider additional factors, like age, credit score, job stability, and property value, before final approval. Hope you found this information helpful.

The mortgage loan criteria vary from one bank to another. I have availed of loans from SBI so I can share their criteria here. Most of the banks have the same set of criteria but it would be better if you tally these again with your respective bank. So let me share its criteria and also how to check mortgage eligibility.

What is SBI’s Mortgage Loan Eligibility Criteria?

To get mortgage loan in SBI, 

• The applicant must have a monthly income of Rs 25,000 or Rs 3 lakhs per annum

• Regular income from all sources will be considered (if only the bank officials appove of them)

• The applicant’s income and the income of spouse/children/ parents/siblings may also be considered for arriving at maximum loan amount, provided they are joining the loan as a co-borrower/guarantor. 

How to Check Eligibility for Mortgage?

To check the eligibility of mortage for SBI, you can visit their official portal and get it. The website you can also follow is:

But let me share how to calculate mortgage eligibility with an example:

Mortgage eligibility is calculated based on several factors, including your income, monthly expenses, and the lender's policies. Lenders generally consider your Gross Monthly Income (GMI) and your Fixed Obligation to Income Ratio (FOIR).

If you have an account with SBI, you can read the details about it here:

Read More:

• You should be a minimum of eighteen years old
• You should be an Indian national
• You should have been involved in your business or employed by your current company for a certain number of years
• Your CIBIL score is required to be at least 650
• You should have the monthly repaying capacity or minimum required salary
• You should have timely paid EMIs for other loans and credit card payments for 3 months before the submission of the loan application
• You should have all the required property documents like sale deed, property tax receipt, etc.