A simple rule many people follow is to keep total housing costs – EMI plus property tax and basic maintenance – within 25–30% of your net monthly income. That leaves enough room for other essentials like food, transport, education, healthcare and some saving. If EMIs start climbing closer to 40–50%, your budget becomes tight and stressful, especially when any unexpected expense appears.
Another test: imagine one income in the family dropping for a few months. Would you survive without panic? If the answer is a strong “no,” the EMI might be on the heavier side. You don’t want to be house rich and cash poor, living in a nice place but constantly worried about money.
Banks might offer you a higher loan than you’re comfortable with; their calculations are not the same as your sleep quality. It’s better to choose a slightly smaller loan that still allows you to enjoy life than a huge one that turns every month into a race.