In short
- The eligible amount is set by assessed income, existing obligations, the property's loan-to-value, the tenure and your credit behaviour.
- A sanction is a ceiling, not a recommendation — affordability is a separate question.
- Change any one input and the answer moves, so an estimate is only as good as its assumptions.
The lender's calculation, in plain terms
There is no single formula that produces 'your' home loan amount. A lender is balancing what you can repay against what the property can secure, and then applying its own policy. Five inputs do most of the work.
One — the income the lender can see
This is assessed, not aspirational. A salary is read from payslips and bank credits; a business income from returns and financials. Income that is real but undocumented often cannot be counted, which is why the same earnings can produce different answers for a salaried and a self-employed borrower.
Two — the obligations already running
Existing instalments reduce the room available for a new one. This is the FOIR idea: the share of monthly income already committed. Clearing a small loan before applying can raise your eligible amount by more than you might expect.
Three — the property's loan-to-value
A lender will not fund the entire price. It lends a share of the property's assessed value — the loan-to-value — and you fund the rest as margin. Remember that stamp duty, registration and other transaction costs sit outside the loan and are yours to arrange.
Four — the tenure
A longer tenure lowers the monthly instalment, which can raise the amount a lender is willing to extend. It also raises the total interest you pay over the life of the loan. The trade-off is real and worth making deliberately rather than by default.
Five — credit behaviour and stability
A clean repayment record and a stable employment or business history support the case. A history of late payments works against it, and repeated loan enquiries in a short window can read as pressure.
Why the number moves
Each lender weighs these inputs differently, so the same borrower can be offered different amounts on the same day. This is not an inconsistency to be gamed; it reflects different appetites for risk and different policies.
Use an estimate, then sanity-check it
The calculator on this site will show you an indicative instalment and the total cost for a given amount, rate and tenure. Treat it as a planning aid, not a quote — and then ask the harder question, which is not what you can borrow but what you want to repay each month for the next fifteen or twenty years.
Questions this raises
Will applying to more lenders increase my chances?
- Usually the opposite. A cluster of simultaneous applications can leave multiple enquiries on your credit report and read as pressure. Sequencing the approach is part of the work.
Does the sanction mean I will receive that amount?
- No. A sanction sets the terms and a ceiling. Disbursement follows against conditions, often in stages tied to the purchase or construction.
Read the full guidance on home loan.