16 JUNE, 2022

People dreaming of buying their own home know that purchasing a house is not a cakewalk. In addition to the cost of the house, there are tons of other expenses that they need to pay before they can own the house. In such a scenario, a quick home loan feels like a boon. However, you must know that you must meet the home loan eligibility which includes a lot of different factors like, location, age, salary, credit score, qualification, employment status, etc.


Your income or salary is one of the most important factors that determine your eligibility to avail a home loan. While it also depends on different banks, all banks and financial institutions want the applicants to earn a certain level of income before they lend them money. The higher your income, the better would be your home loan deal. Why is salary so important, and how does it affect your home loan eligibility? Let's find out.


What is the minimum salary requirement for a home loan?

Lenders require every home loan borrower to have a minimum salary to be eligible for a loan. If your salary is lower than that limit, they could reject the loan or ask you to have a co-borrower to bear the loan obligation. Typically, you must have a monthly salary of Rs 20,000 if you reside in Mumbai, Pune, Chennai, Bangalore and Delhi. You are eligible for a home loan of Rs 15,000 if you live in any other city. However, the minimum salary for home loans can vary based on lenders. 


How does your salary affect your housing loan eligibility?

The lender determines your home loan eligibility with a few eligibility criteria. Salary is one of the crucial ones. Through your salary and income, lenders determine your repayment capacity and creditworthiness. If you have a low salary, it could directly indicate that you might not be able to repay the loan and default on EMIs. Similarly, if your salary is above the required limit, lenders find you a less risky borrower and could offer affordable interest rates. Lenders can accept your loan application with a low salary, provided other eligibility criteria are met, but will offer you lower loan amount and higher interest rates.


Your job profile is also significant in determining your housing loan eligibility. If you are employed with a small-scale organisation, are freelancing or have a start-up, there could be issues in receiving a steady salary. This is why lenders usually offer higher interest rates for such applicants. On the other hand, if you are employed with a public sector company, a multinational or a reputed private company, you have more chances of getting a timely and steady flow of income every month and enjoy higher eligibility. Therefore, your job profile and employer can also determine your home loan approval and interest rates. 


Your salary is a significant housing loan eligibility criterion which can make or break your dream of buying a house. Therefore, apply for a home loan only after checking your eligibility. You can use a home loan eligibility calculator online for instant results. 

Latest Comments

Leave a Comment

200 Characters

Read Next


Bank vs. HFC: What Should You Choose for Your Home Loan?


Bhulekh Odisha 2023: A guide about checking Land records, verfication of naksha, ROR Online


Stamp Duty & Property Registration Charges in Chennai, Tamil Nadu

Load More

Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.