How much home loan can you actually get on your salary in Nepal?
Banks approve the lower of two numbers: what your salary can service and what the LTV cap allows. Here's the FY 2082/83 math, with a salary-to-loan table at 80% LTV and 8% rates.
A cousin called in Mangsir, mid-house-hunt, convinced he could afford a Rs 1.5 crore flat in Bhaisepati. His logic: he earned Rs 1.2 lakh a month, the bank lends up to 80%, so it would hand him Rs 1.2 crore and he'd find the other 30 lakh somehow.
The bank's offer came back at Rs 72 lakh. Not because the flat wasn't worth it, but because his salary couldn't service the EMI on anything larger. He'd been doing the property-value math and skipped the income math entirely. The two are different gates, and the loan is whichever one is smaller.
Gate one: the LTV cap
The loan-to-value ratio limits how much the bank lends against the property's appraised value, not its asking price. The bank's own valuer decides the value, and it's often a touch below what the seller quotes.
The FY 2082/83 monetary policy eased the rules for first-time buyers to push housing credit:
| Borrower | Max LTV | Loan ceiling |
|---|---|---|
| First-time homebuyer | up to 80% | Rs 3 crore (raised from Rs 2 crore) |
| Repeat / other buyers | 50–70% | — |
The 80% rate isn't automatic. To qualify for it, the property must not exceed 3,000 sq ft, you must have no prior home loan from any institution, and you can't count rental income from the property as a repayment source. Miss any condition and you fall into the lower-cap bracket. Sources differ on what that bracket is: the Nepal Economic Forum's summary puts other buyers at 70%, while the detailed directive language keeps individuals who already hold a home loan at 50% and reserves 70% for licensed developers and approved housing projects. Either way, 80% is unambiguously a first-time-buyer rate.
Banks also apply different ratios by purpose. Himalayan Bank, for example, finances 80% of value for a home purchase but only 60% for buying land alone, and up to 100% of the cost estimate for construction. So the 80% headline is for a ready home; bare land gets you less.
What this gate means in rupees: on a property the bank values at Rs 1 crore, a first-time buyer can borrow up to Rs 80 lakh and must bring Rs 20 lakh as down payment. That down payment, plus the registration and malpot costs that run another several percent, is the cash you need on the table before the loan even starts.
Gate two: what your salary can service
This is the gate my cousin forgot. Banks won't let your EMI swallow your whole paycheck. They cap the total monthly EMI at a fraction of your income, and they count every existing EMI against it.
Global IME states the test plainly: the EMI should not exceed 50% of gross income, and not exceed 80% of disposable income. Different banks use slightly different fractions, but half your income is the working rule. If you already pay Rs 15,000 a month on a car loan, that comes out of the ceiling first, leaving less for the home loan EMI.
Working backward from an EMI ceiling to a loan amount uses the standard reducing-balance formula:
EMI = P × r × (1+r)ⁿ ÷ [(1+r)ⁿ − 1]
where P is the principal, r the monthly rate (annual rate ÷ 12), and n the number of months. The full EMI mechanics are in their own post, with a calculator. The number that matters here: at 8% over 20 years, each Rs 1 lakh of loan costs about Rs 836 a month. Flip that around and a salary maps to a serviceable loan like this:
| Net monthly income | EMI ceiling (50%) | Serviceable loan (8%, 20 yr) |
|---|---|---|
| Rs 50,000 | Rs 25,000 | ~Rs 30 lakh |
| Rs 75,000 | Rs 37,500 | ~Rs 45 lakh |
| Rs 1,00,000 | Rs 50,000 | ~Rs 60 lakh |
| Rs 1,50,000 | Rs 75,000 | ~Rs 90 lakh |
| Rs 2,00,000 | Rs 1,00,000 | ~Rs 1.2 crore |
This table is my own illustration, not a bank's published chart; no Nepali bank prints a salary-to-loan formula, so run your own numbers at your bank's actual rate and tenure. But the shape holds: roughly Rs 60 lakh of loan per Rs 1 lakh of net income, before any existing EMIs are subtracted.
That's why my cousin got Rs 72 lakh, not Rs 1.2 crore. His Rs 1.2 lakh income supported an EMI around Rs 60,000, which at the offered rate and tenure financed about Rs 72 lakh. The flat's price was irrelevant to gate two.
The loan is the lower number
Put both gates together and the rule is simple: the bank sanctions the smaller of the LTV amount and the income amount.
Three cases make it concrete, all for a first-time buyer at 80% LTV, 8% over 20 years:
| Scenario | Property value | LTV gate (80%) | Income gate | Sanctioned |
|---|---|---|---|---|
| Modest flat, strong salary | Rs 60 lakh | Rs 48 lakh | Rs 90 lakh (Rs 1.5 L income) | Rs 48 lakh |
| Pricey flat, average salary | Rs 1.5 crore | Rs 1.2 crore | Rs 72 lakh (Rs 1.2 L income) | Rs 72 lakh |
| Balanced | Rs 1 crore | Rs 80 lakh | Rs 78 lakh (Rs 1.3 L income) | Rs 78 lakh |
In the first case the property is cheap relative to the salary, so the LTV gate binds. In the second the salary is the bottleneck. The third is roughly balanced, which is what a well-matched purchase looks like. Most first-time buyers stretching for the biggest flat they can find hit the income gate, like my cousin.
Raising the ceiling: co-applicants and tenure
Two legitimate levers raise gate two without raising your salary.
Add a co-applicant. Banks let you bring in a co-applicant whose income is added to yours for the repayment-capacity test. Global IME lists eligible co-applicants as spouse, father, mother, brother, or sister living in the same family. A working spouse earning Rs 80,000 added to your Rs 1 lakh lifts the combined EMI ceiling from Rs 50,000 to Rs 90,000, pushing serviceable loan from about Rs 60 lakh to roughly Rs 1.07 crore. The co-applicant is jointly liable, so this is a real commitment, not a paperwork trick.
Stretch the tenure. A longer term lowers the EMI per lakh, which raises how much loan a given EMI ceiling supports. Most banks go to 25 years; Global IME advertises up to 30. The catch is the age cap: Himalayan Bank's rule is that your age plus the tenure can't exceed 70, so a 45-year-old can't get a 30-year loan. And a longer tenure means more total interest paid over the life of the loan, even though each month is lighter.
What you bring besides the down payment
Eligibility isn't only income and property value. Banks also want to see:
- A salary that's documented and stable. Salary slips, an employment letter, and bank statements showing the salary credited. Self-employed borrowers face a higher bar — annual income evidence and two to three years of history. If you don't already know how your salary slip breaks down into basic, allowances, and deductions, that's worth reading before you apply, because the bank reads it line by line.
- Tax clearance. Income tax returns or a tax clearance certificate. A clean filing record helps; gaps raise questions.
- A processing fee. Typically 0.5% to 2% of the loan, though several banks cap it lower — Nabil's is around 0.75%. On a Rs 60 lakh loan, even 0.75% is Rs 45,000, payable upfront.
- Property papers. Lalpurja, blueprints, and a valuation report the bank's valuer signs off on. The land-document checklist covers what to verify before you commit.
Floating rates change the answer over time
One thing the eligibility table hides: the rate you qualify at isn't fixed for the life of the loan. Nepali home loans are mostly floating, built as a base rate plus a premium and reset quarterly. As of mid-2026, floating rates ran roughly 5% to 9% across banks, with Nabil near the bottom around 5–7%.
That matters for eligibility in a quiet way. Banks assess your EMI at the current rate, but if rates rise over the next few years your EMI rises too (or your tenure stretches), eating further into your income. Borrowing right up to the 50% ceiling at today's low rates leaves no cushion for a rate climb. Leaving a margin is the difference between a loan that stays comfortable and one that squeezes when the base rate moves.
What you actually need to know
Three takeaways.
- The loan is the lower of the LTV gate and the income gate. First-time buyers get up to 80% of property value (70% otherwise), capped at Rs 3 crore. Separately, the EMI can't exceed about half your income. A high salary won't buy a cheap flat a bigger loan, and an expensive flat won't override a thin paycheck.
- Budget roughly Rs 60 lakh of loan per Rs 1 lakh of net income at 8% over 20 years, then subtract every existing EMI from that capacity. A co-applicant's income or a longer tenure raises the ceiling; existing debt lowers it.
- Leave a cushion below the 50% cap. Floating rates reset quarterly, so borrowing to the absolute limit at today's low rates is a bet that rates won't rise. They moved from double digits to single digits in a few years and can move back.
Working out whether a specific flat is in your range? Email parjanya57@gmail.com with your net income, existing EMIs, and the asking price. Real cases sharpen the math for other readers.
This post is part of the Nepal Money Basics guide — the big-ticket decisions section.