Buying or building your own property is a step of great financial consequence. That's why you should calculate everything carefully before making a decision and create a financing concept with sufficient reserves.
The most important thing in brief:
- Many people dream of having their own four walls. Before buying or building a property, check carefully what you can afford.
- We show you how you can determine your financial options in a structured manner.
- Our checklist for calculating the possible rate and loan amount also helps.
If you want to know how much credit you can afford, you can hardly avoid comparing your monthly income and expenses. But before you start doing the exact calculations, start with a rough overview: Does your (financial) situation even suit a loan, and if so, to what extent?
What loan payment can you afford?
There are rules of thumb according to which you should only use a certain proportion of your net income for a property. Many banks advise that the loan payment should not be more than 40 percent of your net income. The remaining 60 percent are necessary for living expenses – including small, occasional repairs and new purchases.
Take the number for what it is: an average value, with deviations upwards and downwards depending on the individual situation. Anyone who has to maintain two cars, commute long distances to work or have to provide expensive care for small children needs more to live on than a childless single who can cycle to work.
A pragmatic alternative is Add up what you have actually saved in a year and look at the previous rent. What you had left at the end of the year is the amount you didn't need for living expenses, which was effectively left over. Look at your accounts and compare the amounts: What did you deposit? What came as salary? Of course, price gains or income are not included. If you become the owner, the previous basic rent will no longer apply. You can then also plan this for the future loan installment.
Then consider whether any expenses or payments only occurred once and could therefore be eliminated in the future. Example: a one-off expensive vacation trip or a bonus payment on top of your salary. Ultimately, you want to get an initial idea of what you have left over each year and how you could then pay off a loan.
Theoretically, the amount that is permanently left is yours maximum loan rate. But think twice before committing yourself. Because if you don't pay the installment a few times, you run the risk of it the bank terminates the loan. And a certain buffer is important in case you have unforeseen expenses or the additional costs in the new property increase. The principle applies: Don't take on more than you can reliably carry in the long term!
It is therefore advisable to put the results of the rule of thumb as well as the pragmatically calculated savings rate to the test again. And that goes in four steps:
1. List current income and expenses
Use the liquidity checklist to determine as accurately as possible what your current income and expenses are and thus calculate the maximum liquidity per month.
