"Buying a ₹1 Crore House? You Need ₹2.2 Lakh Take-Home Salary to Afford the EMI"

The bank's loan approval letter arrives, and the family celebrates. "They've approved ₹80 lakh! We can finally buy the ₹1 crore flat." A few months later, the same household is skipping SIPs, putting a hospital bill on the credit card, and wondering where the money went.

This story is common, and the root cause is simple: a lender approving a loan is not the same as you being able to afford it comfortably. A recent Mint report, quoting Sanjiv Bajaj, joint chairman and managing director of Bajaj Capital, put real numbers on what a ₹1 crore home actually demands from your salary.

Quick answer

• With a 20% down payment of ₹20 lakh, you borrow ₹80 lakh.
• At an illustrative 8% interest for 20 years, the EMI is about ₹66,900 a month.
• To manage that comfortably, Bajaj says you'd ideally need a monthly take-home salary of around ₹2.2–2.3 lakh, assuming no significant existing debt.

Why this matters now

Home prices in Indian cities mean ₹1 crore is no longer a "luxury" budget for many salaried buyers. But the EMI you sign up for will stay with you for 15-20 years or more. "The first thing to look at is not just how much loan a bank is willing to offer, but how comfortably the buyer can repay it every month," Bajaj told Mint.

What the numbers actually say

The salary you need depends on four things: the loan amount, interest rate, tenure, and your existing commitments. Bajaj recommends keeping your home loan EMI within 25-30% of your monthly take-home income.

Here is how an ₹80 lakh loan at an illustrative 8% a year looks across tenures, using a 30% EMI-to-income ratio:

These are indicative calculations assuming the rate stays at 8% for the whole tenure. Your lender's actual offer and future rate changes will move these numbers.

The hidden cost of a longer tenure

Stretching the loan to 30 years drops the EMI to ₹58,700 and the salary needed to ₹1.96 lakh. Tempting, right? But a longer tenure means paying interest for longer.

Look at the 20-year case: on an ₹80 lakh loan at 8%, total repayments come to about ₹1.61 crore, including around ₹81 lakh in interest, if the rate never changes. In other words, you pay back roughly the loan amount again as interest.

A shorter tenure saves interest but needs a higher income. A longer one gives breathing room but costs more overall. That is the trade-off, and only your budget can decide it. If you have a floating-rate loan, your EMI or tenure can also change as interest rates move.

When does an EMI become "too much"?

"The EMI starts becoming uncomfortable when it leaves very little room for everything else," Bajaj said. Warning signs include:

• You have to stop your monthly investments to pay the EMI.
• You rely on credit cards for unexpected expenses.
• You keep dipping into savings to make ends meet.

If any of these sound familiar, the property may be beyond your comfortable budget, even if the bank said yes.

Mint gives a simple example: a ₹67,000 EMI might look fine for someone earning ₹2.2 lakh a month. But add a car loan, a personal loan, or big family expenses, and the same EMI can become stressful.

Who is affected

• First-time salaried buyers who use the bank's eligibility number as their budget.
• Single-income families where one job loss or career break can disrupt payments.
• Buyers with existing loans like car or personal loans.
• Families supporting parents, where medical and household costs can spike suddenly.

What to do now

1. Work backwards from the EMI. Bajaj advises deciding the EMI you can comfortably afford first, and only then the property price. Don't start from the maximum the lender will finance.
2. Keep the EMI within 25-30% of take-home pay. This leaves room for household costs, savings and surprises.
3. Budget for the extras. Stamp duty, registration, interiors, furnishing and ongoing maintenance can substantially increase the upfront amount you need.
4. Don't empty your savings for the down payment. Keep an emergency fund intact after paying the down payment and charges.
5. Stress-test your plan. Ask: could I keep paying if my income stopped for a while, or if interest rates went up?
6. Think long-term. Over a 15-20-year tenure, career breaks, growing family responsibilities or higher living costs can change your capacity to repay. Don't decide only on today's salary.

Common mistakes

• Treating loan approval as proof of affordability. Lenders use their own criteria; they don't see your family responsibilities or future goals the way you do.
• Using most of your savings on the purchase, leaving the household financially vulnerable.
• Ignoring the total interest when choosing a longer tenure.
• Forgetting other loans when calculating how much EMI you can handle.

FAQs

What salary do I need for a ₹1 crore house? With ₹20 lakh down and an ₹80 lakh loan at 8% for 20 years, Bajaj suggests a take-home salary of around ₹2.2–2.3 lakh a month, assuming no significant existing debt.

Is a 30-year loan a smart way to lower the EMI? It lowers the EMI to about ₹58,700 in this example, but you pay interest for much longer. Weigh whether the flexibility is worth the extra cost.

What EMI-to-income ratio is safe? Bajaj recommends keeping the home loan EMI within 25-30% of monthly take-home income.

What costs besides the EMI should I plan for? Stamp duty, registration, interiors, furnishing and maintenance.

Ultimately, the right home budget is the repayment your household can sustain while protecting its savings and goals, not the biggest number a bank will approve. Would you stretch to a 30-year loan for your dream home, or buy smaller? Share your view in the comments.

This article is for education only and is not investment, tax or legal advice.

Sources

• Mint: Buying a ₹1 crore house? Here's the monthly salary you need to afford the home loan EMI comfortably