Calculating your home price you can afford is straightforward once you know the Home Affordability formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Home Affordability Calculator.
What is Home Affordability?
The Home Affordability calculation tells you your home price you can afford from a few simple inputs. The figure you are solving for here is the home price you can afford, expressed in INR.
The Home Affordability formula
The core formula is:
Home price you can afford = (Net monthly income × Max % of income for EMI ÷ 100) × (1 - pow(1 + Home loan interest rate ÷ 100 ÷ 12, -(Loan tenure × 12))) ÷ (Home loan interest rate ÷ 100 ÷ 12) + Down paymentHere is what each input means:
- Net monthly income — a money amount. Example: ₹1,00,000.
- Max % of income for EMI — a percentage, such as an annual rate. Example: 4%.
- Home loan interest rate — a percentage, such as an annual rate. Example: 9%.
- Loan tenure — a value you set on the slider. Example: 20 years.
- Down payment — a money amount. Example: ₹10,00,000.
How to calculate it step by step
- Write down the net monthly income (for example, ₹1,00,000).
- Write down the max % of income for emi (for example, 4%).
- Write down the home loan interest rate (for example, 9%).
- Note the loan tenure (for example, 20 years).
- Write down the down payment (for example, ₹10,00,000).
- Apply the formula above to get your home price you can afford.
- Double-check the result with the Home Affordability Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Net monthly income | ₹1,00,000 |
| Max % of income for EMI | 4% |
| Home loan interest rate | 9% |
| Loan tenure | 20 years |
| Down payment | ₹10,00,000 |
| Home price you can afford | ₹54,45,798 |
| Loan amount | ₹44,45,798 |
| Affordable EMI | ₹40,000 |
With net monthly income of ₹1,00,000, max % of income for emi of 4%, home loan interest rate of 9% and loan tenure of 20 years, the home price you can afford works out to ₹54,45,798.
Example 2
With net monthly income of ₹2,00,000, max % of income for emi of 4%, home loan interest rate of 9% and loan tenure of 20 years, the home price you can afford works out to ₹98,91,596.
| Result | Value |
|---|---|
| Home price you can afford | ₹98,91,596 |
| Loan amount | ₹88,91,596 |
| Affordable EMI | ₹80,000 |
Example 3
With net monthly income of ₹50,000, max % of income for emi of 4%, home loan interest rate of 9% and loan tenure of 20 years, the home price you can afford works out to ₹32,22,899.
| Result | Value |
|---|---|
| Home price you can afford | ₹32,22,899 |
| Loan amount | ₹22,22,899 |
| Affordable EMI | ₹20,000 |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
- Annual rates must be converted to the period you are calculating for (for example, divide an annual rate by 12 for a monthly figure).
Prefer not to do the maths by hand? — the Home Affordability Calculator does it instantly, for free, with the formula and a worked example built in.
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