Maximum home loan from income and a DSR cap.
Maximum loan
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Affordable installment
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Total repayment
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The number the bank works out before you do
When you walk into a bank for a home loan in Pakistan, the first thing the credit team calculates is not the value of the house. It is how much of your monthly income is already committed, and how much room is left to service a new installment. That ceiling, the debt-service ratio, is the gate everything else passes through. This calculator runs the same logic in reverse. You give it your net monthly income, what you already pay on other loans, the markup rate, and the tenure, and it tells you the largest loan those numbers can support. It is the figure to know before you fall in love with a property you cannot finance.
The structure is bank-agnostic and stable, even though each lender sets its own exact ratio. Banks cap your total monthly installments at a share of net income, commonly somewhere in the 40 to 50 percent range. Subtract your existing installments from that cap and you get the affordable installment, the slice available for the new loan. Then the amortization formula is inverted: knowing the installment you can afford, the markup rate, and the tenure, the tool solves for the principal that produces exactly that installment. A higher income, fewer existing loans, a lower markup rate, or a longer tenure all lift the answer.
PKR 400,000 income, worked end to end
Take someone earning PKR 400,000 net a month, already paying PKR 30,000 on a car loan, looking at a 20-year home loan at a 20 percent markup rate, with the debt-service cap set at 45 percent. First the cap: 45 percent of PKR 400,000 is PKR 180,000 of total allowable installments. Strip out the existing PKR 30,000 and PKR 150,000 is free for the new loan. Feeding PKR 150,000 a month, 20 percent annual markup, and 240 months into the inverted formula gives a maximum loan of about PKR 8,829,634. The steps:
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Here is the sobering part. At a 20 percent rate over two decades, the cost of borrowing dwarfs the loan itself. The live chart in the calculator above shows the principal vs. markup split for any inputs you enter.
Eligibility is the ceiling, not the target
The maximum loan is what you could borrow, not what you should. Borrowing right up to a 45 percent debt-service ratio leaves almost no cushion for a rate rise, a medical bill, or a stretch without a bonus, and Pakistani home loans are typically floating, so the installment can climb mid-term. A practical tip: rerun the calculator with the rate set two or three points higher than today's, and make sure the installment at that level still fits your life. If it does not, borrow less than the ceiling. Lenders will also expect you to fund a down payment yourself, often a fifth or a quarter of the property value, which this tool does not size; the loan it shows is the financed portion only.
The field people get wrong
An edge case to watch is the existing-installments field. People often forget a credit card minimum, a personal loan, or a guarantee they have signed for someone else, all of which a bank will count against your ratio. Underreport them here and the calculator will overstate what you qualify for, then the bank's own check will pull the figure back down and the gap can derail a deal late. Capture every recurring commitment honestly. The tool suits a salaried buyer doing early affordability planning, before they approach a bank, so they walk in with a realistic price range rather than being talked into the maximum.
Does a longer tenure really help me qualify for more?
Yes, because stretching the same affordable installment over more months supports a larger principal, so eligibility rises. The catch is total cost: a longer tenure at a high markup rate means far more markup paid overall. Use a longer tenure to qualify if you must, but understand you are paying for that flexibility over the life of the loan.
Is the markup the same as conventional interest?
For affordability maths, treat them the same way. Islamic home finance in Pakistan, such as diminishing musharakah, is structured differently in legal and contractual terms, but the monthly outlay still behaves like an installment against a profit rate. This calculator models the installment generically, so it works as a planning estimate whether your financing is conventional or Shariah-compliant.
Will being a tax filer affect my home loan?
It can affect the cost side rather than the eligibility maths here. Non-filers face higher withholding on property transactions and some banking activity, which raises the overall cost of buying, and lenders generally prefer documented, filer borrowers. Becoming a filer before you transact is usually the cheaper path. Confirm the current withholding differences with the FBR.