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HBW KNOWLEDGE / PLANNING

What monthly payment can you sustain?

A suitable payment follows from your future household budget, including ownership costs, reserves and foreseeable changes.

Use the costs you will have after buying

Your existing basic rent will generally stop after moving. Other costs remain or rise: energy, insurance, maintenance and apartment service charges. Spread annual bills over twelve months and include existing loans, travel and childcare costs.

An example household budget

Monthly itemExample
Reliable household net income€5,200
Living expenses, transport, insurance and commitments− €2,700
Future ownership costs, excluding the mortgage− €450
Reserves and additional contingency− €350
Remaining mortgage payment capacity€1,700

Avoid counting the same expense twice, for example costs already covered by apartment service charges. A lender will also assess your household using its own criteria.

Connecting the payment to the loan

For a repayment mortgage, the initial monthly payment can be approximated as: loan × (annual borrowing rate + initial annual repayment percentage) ÷ 12. A €300,000 loan at an assumed 4% borrowing rate and 2% initial repayment gives €1,500 a month. The rates are illustrative, not a current offer.

Test the more difficult years too

Frequently asked questions

Is 40% of income a safe limit?

A percentage cannot replace a household budget. Two households with the same income can have very different commitments.

Is the lowest payment always best?

Lower repayment reduces today’s payment but generally leaves more debt outstanding. The payment, repayment period and future interest risk belong together.

What does this mean for your plans?

Discuss your purchase price, own funds and intended borrowing with us.

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