Short answer: FOIR (fixed obligation to income ratio) is the share of your net monthly income that a lender lets you spend on all EMIs combined, including the new home loan. It is usually 50% to 65%, higher for larger incomes. Your FOIR limit, the interest rate and the tenure together decide how much you can borrow.
By Vijay Arjun, DME, LIC Housing Finance (code HYD0087), Elite Financial Services. Last reviewed: 29 September 2026.
The formula
FOIR = (all monthly EMIs, including the proposed home loan EMI) ÷ net monthly income × 100
If you earn ₹80,000 a month and pay a ₹10,000 car-loan EMI, and the home loan EMI would be ₹38,000, your FOIR is (₹10,000 + ₹38,000) ÷ ₹80,000 = 60%. If the lender’s limit for your income is 60%, you are just within it; if it is 50%, you would need a smaller loan, a longer tenure or a co-applicant.
What counts as a fixed obligation
- EMIs on car, personal, education, consumer-durable and other home loans
- A share of your credit card outstanding (lenders typically count a small percentage of the balance as a monthly obligation)
- Loans you have guaranteed or co-signed may be considered
Rent, insurance premiums and SIPs are usually not counted as fixed obligations, though lenders do look at your overall spending in bank statements.
Turning FOIR into a loan amount
- Available EMI = net income × FOIR limit − existing EMIs
- Loan amount = available EMI ÷ EMI per ₹1 lakh × ₹1 lakh
Example: ₹80,000 income, 60% limit, ₹10,000 existing EMI: available EMI = ₹48,000 − ₹10,000 = ₹38,000. At an illustrative 7.75% over 20 years (₹821 per ₹1 lakh), that supports about ₹46 lakh.
How LIC Housing Finance applies it
LIC HFL’s approach, as we explain on our homepage, deducts your existing EMIs from income first and then applies the eligibility percentage to what remains. For a borrower earning ₹1,00,000 with a ₹20,000 EMI and a 65% factor, that leaves ₹52,000 for the home loan EMI (65% of ₹80,000), compared with ₹45,000 if the EMIs were deducted after applying the factor. That ₹7,000 difference is worth about ₹8.5 lakh of extra loan over 20 years at 7.75%. Policies can change, so we confirm the current method for every file.
How to lower your FOIR
- Close small loans before applying, especially ones with only a few EMIs left.
- Pay down credit card balances.
- Add an earning co-applicant to increase the income side.
- Choose a longer tenure, which lowers the new EMI (within the age limit).
- Show all regular income, such as rental income backed by agreements and bank credits, if the lender accepts it.
Related guides
What to do next
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Frequently asked questions
What is a good FOIR for a home loan?
Staying within 50–60% of net income for all EMIs is comfortable for most lenders; higher incomes may be allowed more.
Is FOIR calculated on gross or net salary?
Usually on net monthly income, as shown in payslips and bank credits.
Do credit cards count in FOIR?
Often yes: lenders typically count a small percentage of your card outstanding as a monthly obligation.
How can I reduce my FOIR quickly?
Close small loans, pay down card balances, add an earning co-applicant, or choose a longer tenure.
More guides
About the author: Vijay Arjun is a Direct Marketing Executive with LIC Housing Finance (code HYD0087) and runs Elite Financial Services, an authorised DSA of LIC Housing Finance in Kukatpally, Hyderabad. Disclosure: We are a DSA, not the lender. Loan sanction, amount, interest rate and tenure are at LIC Housing Finance’s sole discretion. Figures are illustrative; your actual eligibility depends on your full profile.