Home Loan Affordability Calculator - Calculate Home Loan Affordability | Kotak Mahindra Bank

Home Loan Affordability Calculator

This article aims to provide you with variables through which one can easily calculate home loan affordability.

What is Home Loan Affordability?

An individual needs to understand the specifics of home loan eligibility before you apply for a home loan. Understanding the various parameters will help you manage your present finances. At the same time, it gives us a good understanding of the EMIs (equated monthly instalments) so that one can control the cash flows without missing the payment dues on time after the home loan is available.

Using Kotak Bank’s Home Loan Affordability calculator, you can calculate your eligibility using the steps and parameters given in the next section.


Which variables are used to calculate affordability of Housing Loan?

Home Loan Affordability calculator takes into account five parameters, and all parameters are listed below:

  • Down Payment: When you are buying a home, you need to make a minimum down payment of 20% of the agreement value (so if your agreement value is Rs. 1 Crore, you are required to make a minimum down payment of Rs. 10 lakhs). Provide the down payment amount in Rupees.
  • Gross Income (monthly): You need to provide Gross Monthly Income in Rupees because you will be eligible for a tax break on your principal and interest payments.
  • Home Loan Interest Rate (yearly): This will be provided by you, and the rate of interest should be annual.
  • Loan Tenure (in months): You can avail of a maximum home loan for a maximum of 30 years (360 months).
  • Other Existing EMIs: You also need to provide details about existing EMIs in Rupees.


How to use a Home Loan Affordability calculator?

In the section given below, you can see the home loan affordability calculator. You need to provide the inputs, and the resultant value will be the amount of home loan you are eligible for.

 

How to use a Home Loan Affordability calculator?


In the section given below, you can see the home loan affordability calculator. You need to provide the inputs, and the resultant value will be the amount of home loan you are eligible for.

Property Cost that you can afford:

30,00,000 INR

Once you input the above variables into the calculator, you will understand the amount you are eligible for the home loan.

Please note that all the above parameters can change after the Bank screens the documents required for a home loan.

Which factors affect your Home Loan Affordability?

 

Four core factors affect Home Loan Affordability and are listed below.

Income: This is the most crucial factor as, after Home Loan, one needs constant cash flows to pay the monthly instalments. So monthly stable income is an essential factor.

Age: Tenure of Home Loan will be decided by the age. That means the younger you are, the tenure of your home loan can be higher since you have more earning potential left.

Existing EMIs: If you already have existing loans, then the amount sanctioned for Home Loan will be lesser as you already have another loan. If you wish to increase the Home Loan amount, then you should consider closing the existing loans.

Credit Score: Before approving a home loan, your credit history will be looked at by the Bank. Your credit history will be reflected in your CIBIL Score. So, the higher the CIBIL Score, the better it is as it reflects a good credit history. Credit history is generally affected by your previous loan payments and the number of loans rejected in the past.

FAQs

How to improve Home Loan Affordability?

One can improve the variables considered to calculate home loan affordability, like Income and Credit Score.

Income: By adding a co-applicant in the process, the combined income of the applicant and co-applicant will be considered for the home loan affordability calculation.

Credit Score: Closing the existing loans and making timely payments on existing loans improve the credit history, improving the overall credit score.

How is Home Loan Affordability calculated?

Home Loan Affordability is calculated by taking into consideration the applicant’s Age, Gross Income, Tenure, Interest Rate and Other EMIs.

How much Home Loan EMI can you afford?

Banks will consider approximately 55-60% of your monthly disposable income to be available for repayment of the home loan.

For more information on Home Loan EMIs visit Home Loan EMI FAQs.

What is the maximum amount I can borrow for a Home Loan?

You can borrow upto 80% for original loan between Rs. 20-75 Lacs, and 75% for original loan above Rs. 75 Lacs of the cost of the property.

Who can be my co-applicant?

If you are an individual - your parents, children (above 18 years), or spouse can be your co-applicants. The co-applicant need not be the co-owner of the property, but a co-owner of a property has to be a co-applicant.