Borrowing Limits: What You Can and Can't Borrow for Real Estate

When you're looking to buy property, borrowing limits, the maximum amount a lender will let you take out based on your financial profile. Also known as loan limits, it's not just about how much you want—it's about what the bank thinks you can pay back. Many people assume their dream home is just a matter of saving enough for a down payment, but the real gatekeeper is your borrowing limit. That number comes from your income, existing debts, credit score, and even the type of property you're buying. It’s not magic. It’s math. And if you don’t understand it, you’ll either overextend yourself or miss out on a great deal because you didn’t know you qualified for more.

Your credit score, a three-digit number that tells lenders how risky you are as a borrower. Also known as FICO score, it directly shapes your borrowing limit. A score below 620 might cap your loan at 70% of what someone with a 760+ could get. Lenders also look at your debt-to-income ratio—how much of your monthly pay goes to bills. If you’re already paying $1,500 in car loans and student debt, that cuts into what you can borrow for a house. And it’s not just about your salary. In places like Mumbai or Delhi, lenders apply stricter limits because property values are higher and risk profiles change. Even if you earn well, if your job isn’t considered stable—freelancers, contract workers, or new business owners—you’ll face tighter caps.

mortgage capacity, how much you can afford to borrow based on your long-term income and expenses. Also known as loan affordability, it’s the hidden number that determines if you’re truly ready to buy. Banks use formulas, but you can calculate it yourself: take your net monthly income, subtract all your fixed payments, then see what’s left. Most lenders cap your housing payment at 30–40% of that leftover amount. So if you make ₹80,000 a month after taxes and pay ₹20,000 in other bills, you’ve got ₹60,000 to work with. At 35%, that’s ₹21,000 for your mortgage. With current rates, that might get you a ₹50 lakh loan—not ₹1 crore. That’s the gap between what you think you can afford and what the system says you can.

Borrowing limits aren’t the same everywhere. In states like Texas or Florida, lenders are more flexible because property taxes are lower and home values don’t spike as fast. In India, banks are cautious. They look at your employment history, the location of the property, and even whether the builder is approved. If you’re buying in a new township with no proven resale track record, your borrowing limit drops—even if your credit is perfect. And don’t forget: if you’re a non-resident Indian, the rules change again. Some lenders won’t lend more than 70% of the property value, and they’ll demand higher down payments.

What’s surprising is that most people never push their limits. They assume they can’t afford more, so they don’t ask. But if you have a solid income, low debt, and a good credit history, you might be leaving money on the table. The right lender can help you stretch your limit legally—through joint applications, adding a co-signer, or choosing a longer loan term. It’s not about lying. It’s about understanding the system.

Below, you’ll find real stories and breakdowns from people who hit their borrowing limits—and how they worked around them. Some found creative financing. Others learned they didn’t need to buy as much as they thought. Whether you’re looking at a 2BHK in Bangalore or land in Tamil Nadu, knowing your borrowing limit isn’t just smart—it’s the first step to owning without regret.