To acquire a home, most Spaniards must get into debt. It is a harsh reality that is transmitted from generation to generation and from which it is difficult to escape. Buying a house is a dream for anyone, but it is also the source of many problems. At the time of sitting down to throw numbers, the big question arises: what is the maximum mortgage according to salary offered by banks?
At Credy we know this well from our experience with urgent loans . Therefore, the salary and / or income that we have will be an essential factor at the time that the banking entities grant us a mortgage loan. Throughout this article you will find all the keys so you know what mortgage you can get depending on what you earn.
Thinking about asking for a mortgage? We tell you what is the maximum amount you can ask for with your salary.
Rate what mortgage you can afford
Before applying for a mortgage loan you must have some clear concepts. The first thing is that you know what your debt capacity is, that is, what percentage of your salary can be used to pay the debts, in this case, of the mortgage. Experts recommend not dedicating more than 35% of our monthly income to face a fast loan of these characteristics. This means that the person must have at least 65% of their salary each month for their basic needs such as feeding, dressing and even saving.
In general, banks do not approve mortgages whose monthly installments represent more than 35% of the applicant’s monthly income. Remember the importance of thinking long term, since the relationship with the financial institution can last for decades because of the mortgage so it is advisable to inquire about the lack , the applicable differential and other concepts that we have already discussed in the blog.
How to calculate the mortgage according to your salary
In addition to the aforementioned 35%, a second aspect should be considered in this area: the fact that, in recent years, banks do not usually grant more than 80% of the value of the home . Usually, the applicant must have saved or have the ability to dispose of the remaining 20% to acquire the home of interest. To this 20% it will be necessary to add an additional 10% that it is also convenient to have saved to face the management expenses that are derived from the sale of the house.
Knowing all this, you can easily find out which loan you can access thanks to the simulator of a mortgage according to the salary . We are going to see some of the most frequent assumptions assuming that you are going to pay the house in 30 years with an Euribor interest (0.163%) + 1.25%. Do not forget that the Bank of Spain advises to calculate the mortgage according to your salary also anticipating the possible fluctuations of the market.
If you charge 1,000 euros
In the event that you are a mileurista you have the possibility of buying a house of up to 125,000 euros . Thus, you would have a monthly fee of 340.96 euros (which does not exceed the 35% limit on total monthly income) and the maximum mortgage according to your salary would be 100,000 euros, which represents 80% of the total value of the House. Therefore, you must have a total of 43,750 euros, which corresponds to the sum of 20% of the value of the remaining house and the derived expenses.
If you charge 1,500 euros
With a salary of 1,500 euros you can buy a home of 188,000 euros and the bank can grant you up to 150,000 euros (80% of the total). In this case, you would have a monthly fee of 511.44 euros. You will need to have 66,200 euros to cover 20% of the remaining cost and 15% of derived management expenses.
If you charge 2,000 euros
If you have a monthly income of 2,000 euros, you have the possibility of acquiring a house that costs a maximum of 250,000 euros. In line with the granting of the mortgage loan of up to 80%, you will get 200,000 euros. The monthly fee that you will have to pay as a mortgage would be 681.92 euros. In addition, you must have 87,500 euros of savings to pay the remaining 20% and 15% of expenses derived.
If you charge 2,500 euros
In the case that you pay 2,500 euros per month, you can buy a house that costs 310,000 euros. In this case, the bank could grant you a mortgage according to the salary of 250,000 euros (80%) and which is linked to a monthly payment of 852.40 euros. Of course, you will need to have savings of 106,500 euros (the sum of the remaining 20% of the value of the home and 15% of derived management expenses).
If you charge 3,000 euros
If you have a payroll of 3,000 euros, you can buy a house for up to 375,000 euros. The bank will grant you 80% of the home, that is, 300,000 euros, which means that your monthly fee will be 1,022.88 euros to cover the payment of the mortgage loan. Also, you must have saved 131,250 euros to pay the remaining 20% of the value of the home and 15% of the management costs that arise from the process.
Conclusions and recommendations on the mortgage according to salary
In view of the above figures, we can draw some conclusions on the granting of a maximum mortgage according to salary.
– People who enter less than 2,000 euros per month, can access a home that costs less than 200,000 euros. For their part, those who charge less than 3,000 euros can afford to buy a house of around 300,000 euros.
– A longer payment term will reduce the monthly fee , although it will also increase interest. On occasion, extending the duration of the mortgage loan too much could mean paying between 50,000 and 100,000 euros more. For example, a mortgage of 150,000 euros put at 20 years at 3% interest, would represent a total cost of almost 200,000 euros because of the interest derived. The same mortgage at 40 years would increase to more than 255,000 euros. The idea is, then, to find the balance between a quota that allows us to live in comfort and a comfortable period that does not suppose excessive interests.
– Knowing what the maximum mortgage is based on the salary that the bank can give us, will allow us to know which is the most expensive home to which we can access. Of course, we must bear in mind that, in most cases, we must have 20% of the value of the house saved.
– Consider the Euribor, especially in mortgage loans that are longer than 30 years. It is a non-stable index and could undergo changes (both upwards and downwards) in the course of this time. Thus, the monthly fee could increase by hundreds of euros if the Euribor rose too much. Anticipate all the scenarios we mentioned in Credy.es.