How to Check If You Are Eligible for a Home Loan

Owning a home is a dream for many, and a home loan can turn this dream into reality. However, securing a home loan is more complex than filling out an application form. Lenders have specific eligibility criteria that you must meet to qualify for a home loan. This article will guide you through checking if you are eligible for a home loan, helping you navigate the complexities of eligibility requirements, including insights into the loan eligibility calculator.

Income and Employment Stability

A primary factor lenders consider is your income and employment stability. To qualify for a home loan, it is necessary to possess a consistent and verifiable income source. Lenders commonly favour applicants with a track record of employment spanning a specific period, typically two to three years, as it indicates job stability. Self-employed individuals may need additional documentation, such as income tax returns and financial statements.

Loan Eligibility Calculator

Many financial institutions offer online calculators to simplify checking your eligibility for a home loan. These calculators consider your income, credit score, debts, and desired loan amount. By inputting this information, you can quickly determine whether you meet the eligibility criteria and how much you may qualify to borrow.

Using these calculators can be a valuable first step in your home-buying journey. It allows you to assess your eligibility and delivers a rough estimation of the loan amount you can secure. However, remember that the final decision will depend on the lender’s specific requirements and your creditworthiness.

Credit Score

The determination of your eligibility for a home loan heavily relies on your credit score. Lenders utilise your credit score to evaluate your creditworthiness and loan repayment capability. A higher credit score enhances your likelihood of approval and may even make you eligible for more favourable interest rates. It is advisable to observe your credit score through credit bureaus or financial institutions and take steps to improve it if necessary.

Age and Eligibility

Lenders often have age restrictions when it comes to home loan eligibility. While the specific age requirements may vary between lenders and countries, most lenders prefer borrowers who are at least 18 years old and have a stable financial history. Some lenders also have an upper age limit for applicants to ensure the loan can be repaid within a reasonable timeframe.

Property Value and Loan Amount

The property value you intend to purchase and the loan amount you request are significant factors in eligibility. Lenders commonly establish a loan-to-value ratio (LTV) that dictates the maximum loan amount they are prepared to provide. To account for the remaining cost of the property beyond the approved loan amount, you may be required to make a down payment. Ensure you have the necessary funds or savings to meet the down payment requirements.

Debt-to-Income Ratio

The debt-to-income (DTI) ratio represents the portion of your monthly earnings allocated to debt payments, encompassing credit card balances, car loans, and student loans. Lenders scrutinise your DTI to gauge your capacity to handle added debt, especially from a mortgage. It is advisable to maintain a lower DTI, as a heightened ratio might impact your qualification for loans. Your DTI can be enhanced by diminishing current debts or augmenting your income.


Securing a home loan is a substantial financial judgment, and understanding your eligibility is crucial before applying. By evaluating factors such as income, employment stability, credit score, age, property value, and debt-to-income ratio, you can gauge your eligibility for a home loan. Additionally, utilising a loan eligibility calculator offered by many financial institutions can provide valuable insights into your potential borrowing capacity. Remember that keeping a good credit score and economic equilibrium can enhance your chances of approval and help you achieve your dream of homeownership.