Glossary
FOIR (Fixed Obligation to Income Ratio)
FOIR is the share of your monthly income that goes to fixed loan payments, including the new home loan EMI. Banks use it to decide how much to lend.
In plain words
FOIR stands for Fixed Obligation to Income Ratio. It answers one question: of the money you bring home each month, how much is already promised to EMIs? Banks add up your existing EMIs, such as a car loan or personal loan, plus the new home loan EMI, and divide by your net monthly income.
FOIR = (all monthly EMIs ÷ net monthly income) × 100
A worked example (illustrative)
Say your take-home pay is ₹1,20,000 a month and you already pay a ₹10,000 car EMI. If a bank caps FOIR at 50%, your total EMIs can be up to ₹60,000. Take away the car EMI and you have ₹50,000 for a home loan EMI. At 8.5% over 20 years, that EMI supports a loan of roughly ₹57.6 lakh.
Close the car loan first and the home EMI room rises to ₹60,000, which supports roughly ₹69 lakh at the same terms. Small loans make a big difference.
Why it matters to you
There is no single legal FOIR limit. Each bank sets its own, often higher for bigger incomes. A FOIR the bank accepts is not always one you will be comfortable with, so look at what is left for living, saving and emergencies.
- Clear or reduce small loans before applying.
- Add a co-applicant’s income if it fits your plans.
- Choose a longer tenure to lower the EMI, knowing you pay more interest overall.
Our eligibility calculator runs this sum for you.
Read more on the blog
Related terms
See all glossary terms. This page explains a term; it is not legal or tax advice, and rupee figures are illustrative.
FAQ
FOIR (Fixed Obligation to Income Ratio): common questions
What FOIR do banks allow?
It varies by bank and income. Many use limits around half of take-home pay for salaried borrowers, sometimes higher for larger incomes.
Do credit card dues count in FOIR?
Banks often count a share of your card limit or outstanding balance. Paying cards down before applying helps.
Does rent count in FOIR?
Usually not, since FOIR counts loan obligations. But you still pay rent while waiting for possession, so budget for it.
How can I lower my FOIR?
Close small loans, add a co-applicant’s income, or take a longer tenure. Each changes the sum differently.
Want someone to walk you through it?
Ask the Reeva team about this, or anything else on your first-home paperwork. We will call back, with no pressure to buy.