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.

  1. You must be able to cover the monthly rate with your disposable income

  2. You must have enough savings to cover the purchase fees

  3. 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 for 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.

Example

Given your disposable income is 40,00 % of your monthly net income of 5.000 €, it means that your monthly mortgage rate can go up to 2.000 €. If you are 30 years old you may be eligible for a repayment rate of 2,00 %, which with a loan of 500.000 € would be about 1.250 €. If you are 50 years old, you may be required to have a minimum repayment rate of 4,00 % to be done by 67 years old. In this case, that would be 2.083 €, which may mean you cannot qualify for this loan amount. We will take your age into account when recommending you the right mortgage product.

Looking for a mortgage?

Use Hypofriend's affordability calculator to see what you can afford based on your personal situation.

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