When the time comes to consider buying a house and requesting a mortgage to be able to pay for the property, we must always keep in mind the savings and income that we have. To calculate the mortgage that can be granted to us, the income will be a determining factor, as will the savings, since we will have to have approximately 30% of the value of the property for the loan to be granted.
Calculate mortgage: according to income
We can calculate the mortgage with the highest installment that can be granted based on the maximum installment that we can pay, which according to the Bank of Spain should not exceed 35% of monthly income.
Are you looking for a mortgage with which to pay cheap installments? In HelpMyCash ‘s ranking of the best mortgages, you will find those with the lowest interest rates.
Interpretation of the table
- Example 1: A couple with a net income of 3,000 euros per month can buy a home for up to 375,000 euros, with which they would pay a monthly installment of 1,022.88 euros.
The bank will grant them 80% of the value of the house, that is, 300,000 euros. But for the loan to be granted, they must have saved 121,500 euros.
These 121,500 euros is the sum of the deed expenses (10%), 37,500 euros, plus 20% of the value of the house that the bank does not finance, that is, 75,000 euros.
- Example 2: On the contrary, a couple whose monthly income adds up to a total of 1,500 euros, can afford to buy a house of up to 188,000 euros, with which they will pay a monthly installment of 511.44 euros.
The bank will grant them 80% of the value of the property, that is, 150,000 euros. And they must have saved 56,400 euros. On the one hand, 18,800 euros of derived expenses plus 37,600 euros corresponds to 20% of the value of the home.
And if the Euribor rises to 3%?
The relationship between mortgages and Euribor influences the share of variable mortgages because the index fluctuates. Therefore, every time we review the loan every 6 or 12 months, the bank will recalculate our monthly installment based on the last value reached by Euribor.
This index is currently listed below zero, but the mortgaged should not be trusted, since in a 30-year PHH mortgage the installment will be affected, up to several hundred euros, by the values that the Euribor marks.
For this reason, we should not calculate the mortgage only according to the value that marks the current Euribor, but it is more intelligent to be proactive and think about what would happen if the index rises to 3%, for example. Could we then pay the mortgage?
Interpretation of the table
Example 1: A couple with a monthly income of 3,000 euros, a house worth 375,000 euros, and a mortgage with a monthly installment of 1,022.88 euros per month.
In this case, if the Euribor rose to 3%, the mortgage payment would rise to 1,844.77 euros, more than 50% of the value of the couple’s monthly income. Therefore, at this point, they will have economic difficulties paying the installments. Perhaps it would have been more interesting to have bought a house for 300,000 euros.
Compare mortgages and choose the best
The calculations that we have elaborated on give some approximate data, but they can vary depending on the mortgage and the bank in which we contract it.we recommend that you compare several offers, at least 3, and choose the one that best suits your economic profile.
Find the best mortgages of the moment and use our free comparator, so you don’t have to leave home to find your mortgage.
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