What Mortgage Can I Afford with My Salary?
January 23, 2025
When considering buying a home, one of the first questions you will ask yourselves is: what mortgage can I afford with my salary? This is key to avoiding compromising your finances and making a responsible decision. In this post, we explain how to calculate it and what factors you should take into account.
How Do I Know What Mortgage I Can Afford?
The first step to determining what mortgage I can afford is knowing your monthly budget. Financial experts recommend that you do not allocate more than 30-35% of your net monthly income to your mortgage payment. This percentage includes both the monthly loan payments and other expenses associated with the home, such as insurance or taxes.
Although this recommendation is still valid, it is important to bear in mind that the increase in housing prices in some regions may cause this percentage to vary slightly depending on individual circumstances. In addition, some banks have started offering mortgages with 100% financing of the value of the property, especially aimed at groups such as young people, which may modify your access capacity.
For example, if your net monthly income is €2,000, the maximum you should allocate to the mortgage would be between €600 and €700 per month. With this amount, you can calculate the approximate price of the home you can purchase and the amount of loan needed.
How much Mortgage Do They Give Me with My Salary?
Knowing how much mortgage they give me with my salary depends on several factors. Banks take into account the following criteria and requirements before granting a loan:
- Monthly income and job stability: The income must be sufficient to cover the mortgage payments without exceeding the recommended percentage. In addition, having a permanent contract or a stable job increases the chances of the application being approved.
- Previous savings: Banks usually finance between 70% and 80% of the value of the property. However, as mentioned before, some financial institutions already offer mortgages that cover up to 100% of the purchase price in certain cases.
- Credit history: A good credit history is essential to demonstrate that you are solvent and will comply with the payments.
In addition, the current trend of lowering interest rates and the Euribor may make monthly payments more affordable, which is an aspect to consider when planning your mortgage.
If you want to know more, we recommend our post on what are the requirements to apply for a mortgage.
How Do I Know if I Will be Granted a Mortgage?
Many people wonder “how do I know if I will be granted a mortgage” before looking for a home. You can follow these steps to have a clear idea of your possibilities:
- Loan simulators: Most banking entities offer online tools to calculate it. You only have to enter your income and savings data to obtain an estimate.
- Mortgage pre-approval: Some financial institutions allow you to apply for pre-approval. This will give you a specific limit on the amount you can request.
- Consultations with specialists: Having the advice of experts such as the professionals at Espígul can make a difference. They will help you better understand market conditions and choose the best option according to your needs.
Calculate your Mortgage with Espígul
Buying a home is one of the most important financial decisions of your life, and knowing what mortgage you can afford is key to doing it safely and responsibly. With a good analysis of income, savings and current market conditions, you can identify the most appropriate option for you.
At Espígul, we not only help you find the perfect home, but we also advise you throughout the mortgage process. Our team of experts works to understand your needs and offer you personalized solutions that adapt to your situation. Contact us and let’s make your dream of owning your own home a reality!
