LTV Ratio and FOIR: How Much Home Loan You Will Really Get in 2026

Buyers tend to ask the bank one question: how much will you lend me? The bank answers with two separate tests and lends you the lower of the two. The first is the loan-to-value (LTV) ratio, a cap tied to the property and set by the Reserve Bank of India. The second is your repayment capacity, usually expressed as FOIR, the fixed obligations to income ratio, which each lender sets internally. Understanding both before you shortlist a home tells you exactly how much cash you need on the table.

LTV: the RBI's cap on the property side

LTV is the loan amount divided by the value of the property the bank accepts. The RBI caps it by loan size. Following its 7 June 2017 circular on rationalising risk weights and LTV ratios for individual housing loans, and as reflected in the RBI's Master Circular on Housing Finance, the caps for banks are:

• Loans up to ₹30 lakh: LTV up to 90%.
• Loans above ₹30 lakh and up to ₹75 lakh: LTV up to 80%.
• Loans above ₹75 lakh: LTV up to 75%.

Why stamp duty is not in the loan

The RBI's Master Circular on Housing Finance tells banks not to include stamp duty, registration and other documentation charges in the property cost they finance, so that the LTV norm is not diluted. The only exception is a home costing ₹10 lakh or less, where these charges may be added. For any luxury purchase, therefore, stamp duty and registration come entirely from your own funds, on top of the down payment.

This matters more than buyers expect. In Gurgaon, a male buyer pays 7% stamp duty in urban areas (Godrej Capital, May 2026), and in Bengaluru the combined stamp duty, registration and cess is roughly 7.6% after Karnataka doubled its registration fee to 2% from 31 August 2025 (Deccan Herald, KS&K). In Chennai the combined sale deed cost is 11% (Square Yards, August 2026).

FOIR: the lender's cap on the income side

FOIR is the share of your monthly income already committed to fixed obligations, including the proposed home loan EMI. The RBI does not prescribe one FOIR figure; lenders set it in their credit policies, and it varies with income level, employer category and co-applicants. Lender explainers such as L&T Finance and Bajaj Finserv describe a range of roughly 40-60% of net monthly income as typically acceptable, with higher-income borrowers often allowed toward the upper end.

The working formula is simple: maximum EMI = (net monthly income × FOIR) minus existing EMIs. The maximum loan is the loan that EMI can service at the bank's rate and your tenure.

Worked example 1: ₹1.2 crore apartment in Gurgaon

Assumptions, stated plainly so you can substitute your own: agreement value ₹1.20 crore; sole male buyer; net monthly income ₹2.5 lakh; an existing car EMI of ₹30,000; lender FOIR of 50%; interest rate of 8.5% for 20 years, chosen for illustration only. At those terms the EMI is about ₹868 per lakh borrowed.

• LTV test: the loan would exceed ₹75 lakh, so the cap is 75%. Maximum loan = ₹90 lakh.
• FOIR test: 50% of ₹2.5 lakh = ₹1.25 lakh, minus ₹30,000 car EMI = ₹95,000 available for the home loan EMI. ₹95,000 ÷ ₹868 per lakh = about ₹1.09 crore.
• Sanctioned loan: the lower of the two, ₹90 lakh. LTV is the binding constraint here, not income.
• EMI on ₹90 lakh: about ₹78,100 a month.
• Cash you need: ₹30 lakh down payment + about ₹8.4 lakh stamp duty at 7% + a registration fee capped at ₹50,000 in Haryana (Godrej Capital) = roughly ₹38.9 lakh before legal, brokerage and interiors.

Worked example 2: ₹2.5 crore villa in north Bengaluru

Same assumptions on rate and tenure. Two co-applicant spouses with combined net income of ₹4 lakh a month and no existing loans; lender FOIR of 55%.

• LTV test: 75% of ₹2.5 crore = ₹1.875 crore.
• FOIR test: 55% of ₹4 lakh = ₹2.2 lakh EMI capacity. ₹2.2 lakh ÷ ₹868 per lakh = about ₹2.53 crore.
• Sanctioned loan: ₹1.875 crore, again limited by LTV.
• If the couple had a ₹1 lakh EMI on another property, capacity would fall to ₹1.2 lakh, the FOIR limit would drop to about ₹1.38 crore, and income would become the binding constraint.
• Cash need: ₹62.5 lakh down payment + roughly 7.6% statutory costs (about ₹19 lakh) = around ₹81.5 lakh.

The 'property value' the bank uses is not always your price

Lenders apply the LTV to the lower of the agreement value and their own technical valuation. If you pay a premium for a high floor, a corner unit or a view, and the valuer does not recognise it, your loan is calculated on the lower figure and the gap comes out of your pocket. For resale homes, a valuation below your negotiated price is common in fast-moving micro-markets. Ask your lender for a valuation before you sign the agreement, not after.

Levers that change the answer

• Add a co-applicant: a spouse's or parent's income raises FOIR capacity, though the LTV cap is unchanged.
• Close small loans first: retiring a car or personal loan before applying often adds more eligibility than a pay rise.
• Extend tenure: at 8.5%, the EMI per lakh falls from about ₹985 over 15 years to about ₹868 over 20 and about ₹805 over 25. Longer tenure lifts the FOIR limit but raises total interest.
• Keep a strong credit score: it affects the rate, which affects the EMI per lakh and hence your FOIR limit.
• Floating-rate prepayment is free: the RBI's Pre-payment Charges on Loans Directions, 2025 bar foreclosure or prepayment charges on floating-rate loans to individuals for non-business purposes sanctioned or renewed on or after 1 January 2026. That makes a slightly larger loan, prepaid later, less costly than it once was.

Where rates stand

The RBI held the policy repo rate at 5.25% at its August 2026 meeting (Outlook Money), with the next decision due on 7 October 2026. SBI's published card shows home loan rates from 7.25% p.a. onwards with effect from 1 April 2026, with your actual rate depending on credit profile and product. We use 8.5% in the examples above as a deliberately conservative planning rate, not a quote.

Estimate your own number in five steps

• Step 1: Write down the realistic all-in agreement value, and the lower valuation the bank might assign if you are paying a premium.
• Step 2: Apply the LTV cap for that loan size (90%, 80% or 75%) to get the property-side ceiling.
• Step 3: Take your net monthly income, multiply by a conservative FOIR (start at 50%), and subtract every existing EMI, including credit-card EMIs and any loan you have guaranteed.
• Step 4: Divide that EMI capacity by the EMI per lakh at a conservative rate and your intended tenure to get the income-side ceiling.
• Step 5: Your likely loan is the lower of the two ceilings. Your cash need is the price minus that loan, plus stamp duty, registration, legal fees and a contingency.

Surprises that appear at sanction

Three issues routinely change the number late in the process. The first is valuation, covered above. The second is tenure: lenders cap tenure by the borrower's age at maturity, so an older applicant may be offered a shorter term than planned, which raises the EMI per lakh and lowers the income-side limit. The third is disbursement: on an under-construction home, the bank releases money in stages against construction, so the sanctioned amount is not the amount available on day one, and you pay interest on each tranche as it is released.

None of these are reasons to avoid borrowing. They are reasons to get an in-principle sanction, with the bank's own valuation, before you commit to the agreement for sale.