How much can I afford or borrow?
The short answer is: it depends. But we’ve done our best to help add some transparency into the different ways to calculate what you can afford. Generally, three rules apply:
You must be able to cover the monthly rate with your disposable income.
You must have enough savings to cover the additional purchase fees.
Your residence status can change your down payment requirements.
That being said, each lender has a slightly different way to calculate what you can afford because they calculate the disposable income differently. Generally, income consists of your net salary. But income from leasing, capital assets, child benefits, pensions, maintenance, and other payments are also added.
In contrast, your expenses such as ancillary costs, food, car, subscriptions, memberships, insurance, and what else you regularly spend money on will be deducted. We will ignore your current rent for the calculation because in the future it will be omitted, but it is generally a good insight into what you can afford.
As a guideline, you can calculate the maintenance costs plus the usual additional costs, such as heating, electricity, garbage disposal, etc., 3,50€ per square meter. These assumptions can vary slightly from bank to bank.
The minimum repayment rate is 1.00%, but it can be higher if you are older, as lenders will want to ensure that you are done or almost done repaying the home loan by retirement.