In short
- FOIR is the share of your monthly income already committed to fixed obligations such as EMIs.
- Lenders use it to test whether a new instalment fits alongside what you already repay.
- It is read together with income stability and credit behaviour, never in isolation — and a lender's ceiling is not the same as your comfort.
What FOIR measures
FOIR stands for fixed-obligation-to-income ratio. In plain terms, it asks: of the money you receive each month, how much is already promised to repayments before anything else is paid?
It is expressed as a share. If a meaningful part of your monthly income is already going to loan instalments, there is less room for another one — regardless of how large that income is.
Why lenders use a ratio at all
A ratio lets a lender compare two very different borrowers on the same footing: someone earning a modest, steady salary and someone earning more but irregularly. It is a way of asking not just how much you earn, but how much of it is still free.
What counts as an obligation
The lender is counting commitments that are fixed and documented, not your ordinary living costs.
- Instalments on existing loans — home, personal, vehicle or property.
- Credit card dues where the account is carrying a balance or has been converted to instalments.
- Other scheduled facilities you are servicing.
Everyday expenses — groceries, school fees, utilities — are not entered into the ratio, but they are exactly what the ratio does not see. That is why eligibility and affordability are different questions.
Gross income or net income?
Lenders generally work from income they can verify and assess, which is closer to net or assessed income than to a gross figure. For salaried applicants that is usually read from payslips and bank credits; for self-employed applicants it is assessed from returns and financials, which can be lower than the cash the business actually generates.
Why the same income gives different answers
- Lender policy — each lender sets its own comfort ceiling, and applies it differently to different profiles.
- Credit behaviour — a history of missed or late payments is read as risk, and reduces room.
- Income type and stability — a steady salary and an irregular business income are not treated alike.
- A co-applicant — a second earner can raise the income the lender is willing to count.
How to improve your position honestly
- Clear smaller obligations where you reasonably can, rather than adding new ones.
- Bring a co-applicant's income into the case if it strengthens it.
- Keep your documented income consistent — under-reporting shrinks the very eligibility built on it.
- Avoid applying to several lenders at once; a cluster of enquiries can read as pressure.
What FOIR does not tell you
A FOIR that satisfies a lender says the instalment is within that lender's limits. It does not say the instalment is comfortable for your household. The ceiling a ratio produces is a maximum, not a recommendation, and the decision about how much to actually borrow is yours.
Questions this raises
Does a higher income automatically mean a larger loan?
- Not by itself. A high income with heavy existing obligations can leave less room than a moderate income with none. The ratio is what the lender reads.
Can I ask a lender what FOIR it uses?
- You can ask, but the answer is usually a policy rather than a fixed number, and it may be applied differently depending on your profile. It is more useful to understand your own obligations clearly.
Read the full guidance on home loan.