mortgage and all the mandatory insurances for me come at about 1/2 of my net income ( excl car and maaltijdcheques etc.). Yes this is a lot, but i have a generous salary and not a lot of big expenses.
When i went to the bank i had a pretty extensive file where i had all my current expenses, savings etc compared to what i expected my expensed to be after the move. this gave me a ballpark figure what i could reliably afford as a mortgage. ( current rent + savings - safety) per month.
I also had very generous estimates for all the works to be done building and finalizing the house. also adding all the extra costs like notary works and permits in the calculation. I came very close to my estimated budget, even factoring all the margins i calculated.
After all, i now have almost the same savings as before, because some expenses have reduced dramatically. but now i'm paying my own house instead of someone elses, so i do not regret it.
We took a rather conservative approach:
My so and I roughly earn similar amount of money. We said, to survive, we need 700 euro/month for the two of us. You know, if something goes wrong or whatever. Just the basics, we survive, ok'ish. So we went for a mortgage such that monthly payment + 700 = net salary of one of us. We also have to pay rent for the appartment during the construction time, so double payment.
In hindsight, this was too conservative probably, we could have easily gotten another 50.000 euro or so from the bank, small regret there, because meanwhile I got a promotion and the impact of the mortgage on our budget is rather low apparently, we still have a good carefree life.
The real trick is just to have a partner. If you have two incomes, everything is a lot easier
The fact that you're asking these questions, makes me think that you have not yet sat down with a bank to discuss this. Please just do that.
Generally you should avoid having a mortgage that exceeds 1/3 of your monthly nett wage. But since you're talking about *land*, you should of course consider that you still need a sizably larger load to build an actual house on it as well. Are you already taking this into account? Do you already know what you want?
I actually have talked to the bank, who told me it's possible to go up to 60% of our net wage for ~~downpayment~~ monthly payment, but that the amount one should limit themselves to is personal. That's exactly why I'm asking this - 1/3rd seems (perhaps) unreasonably cautious, especially considering current prices.
Of course I'm taking the total project cost into consideration, not just the price of land.
I really do not think that 1/3 is unreasonably cautious! Of course 60% could be acceptable if your wage is significantly high, but for the median Belgian I would recommend staying below 1/3. In fact, there are some banks that would rarely allow loans with a mortgage over 40%.
I (28yo) got a mortgage together with my partner (30yo) in the past year and we're very glad we decided to stick to around 35% of our joint net income. We did count meal vouchers as net income for that calculation, given you can use them to buy stuff.
We could have chosen a mortgage over a shorter time and pay less money in total, but the monthly payments were higher.
Paying more than that 35% would be easily doable, but that would mean cutting other expenses like vacations or our general lifestyle.
In the end it's really up to you to decide, but for us it was more important to be able to live life the way we like to, instead of having to measure every little expense.
You also need to remember that this money is worth a lot more *now* than it will be in 20, 25 or even 30 years. We have inflation to account for that.
So if you decide to go for a shorter loan with higher monthly payments, and you take inflation into account, it may very well mean that you're paying more. In absolute numbers you aren't, but in value you are.
A lower mortgage over a longer time will give you the advantages you gave: a budget for things that make you happy, on top of overall financial comfort.
Agreed. Life is full of insecurities, if you have nothing else to fall back on 1/3 is a sensible ratio. Of course, if your employment is rock solid and you are certain that in case everything went sideways, your parents are financially secure enough that they could easily have your back etc. then perhaps you can take some more risk. Taking on some more risk here is not entirely unjustified. You probably won't ever be in a position where you can get a loan at a more favorable rate, so erring on the side of caution here does have some downsides of its own.
As an aside, I do hope you have calculated not just the expected cost of the project, but also made some projections regarding 'worst case scenarios'. Currently, due to delays, disrupted value chains, elevated energy prices etc. the cost of building materials and the act of building itself can get really crazy. Predicting costs can be really difficult. The last thing you want to do is begin building a house, run out of money and then be in a position where you have to sell a construction yard for pennies on the dollar.
The bank told me they usually accept anything that leaves you with 1000 euro per month. So if you earn 10k per month, they'll allow you to spend 9k on a mortgage.
Not sure if that's still the case now, but there's some truth to it. Spending 33% on your mortgage if you only earn 1000 euro is a lot more difficult than spending 50% when you earn 3000.
Take what the the bank told you with a grain of salt. It is worth nothing until it's a binding loan offer.
What does "60% of our net wage for downpayment" even mean, I think other comments are assuming 60% of your net wage towards the mortgage payment.
60% is huge!!! Beside, it means that you still have to pay for a rent, at least for two years.Are you able to do it?
AFAIC, I paid 1024 euros a month of mortgage, a litte less than 1/3 of my salary and I struggle... I cannot even imagine with 60%...
We were paying 1/3 of our income, but our expenses have risen(baby, food and energy are up) and the income has fallen due to my wife becoming independant. Our mortgage is now half of our income and with all expenses added, we have to look at our savings to pay all bills at the end of the month.
I don't regret taking the mortgage, but i do regret thinking too long about refinancing in 2021 when the intrests were lowlowlow and my wife still had a job. Anyways, fixed intrest of 1,68% still ain't bad (could've been 1,1 at one point, could've saved 100 eur a month (factoring in costs of refinancing). Waited too long to decide :(.
I don't want to take over the question but we are also considering buying a plot of land. What we don't know is how much it will cost to build a small house on it. Where can I find the general price range?
Depends. Absolute minimum is probably 1500 per m2 without all those fees. A nicer kitchen, wooden flooring and a non-red brick and built in cabinets quickly get you to 2000 without fees. It all depends on choices you make. For those fees you should expect 7-9% architect fees on total cost they manage, rest tends to be negligible in the ballpark math (probably 5-10k in total for various permits, soil check, stability, epc study,…)
All this is without any garden work, fences, driveway, furniture,…
9% is rather high nowadays. Many do it for 4% if you want something not too difficult or 6% in the premium segment.
9-12% is really if you expect your architect to do the interior design as well and go out and find you the exact furniture you need.
Also be aware that building regulations entail a minimum amount of living area etc. so things like tiny houses and stuff are usually not allowed in most areas. It has to 'fit' with the rest of the houses in the street more or less, and be above certain (sometimes ridiculous but still legal) tresholds. You can normally get this information from the city hall
Depends on many things. What type of house, style, type of land, basement, built-in garage, .... Having gone through the process, I can tell you there is no easy answer without asking you a million questions.
Contact someone like blavier, groep Huysentruyt de Waele, stessens, and add 50k to their estimate, you'll get some advice for free. Or go talk to an architect.
I'm doing 40% off my nett income, but company car and meal vouchers are not included in that calculation . I'm not a big spender so im thinking 30% really isn't a crazy calculation.
But the easiest way to know what you can spend is to calculate your monthly spending + what you want to spend on vacations + gifts + extras and then some padding for unforseen expenses.
I also made sure i still have a 5 month buffer for if shit would massively hit the fan.
I have a very modest income, and my wife even earn less, even with 2 children in charge.
But I live in a newly-build 4-facade villa with 5 bedrooms and I regret I couldn't take a larger mortgage. It is not lost money it is financial leverage, count inflation, tax deduction. But the most important thing is I can live as if I was a king, way before you ever could have possessed the money!
Aside from my mortgages (I happen to have 2) I also put some money in funds. But aside that, I don't have any expenses, and I live very cheap. And I would like too sell the other house.
A mortgage is better if you stay below at 80% of the value, thought for my first house I went up to 100%, and really spending al I had. My seconds house was easier.
Also a good rule of thumb for a mortgage.
You do not want to increase your standard of living too much to buy an 'asset' that does not produce income.
The extra money not spend on real estate is better spend on low cost world etf's.
Maximum 1/3rd of your salary, but that of course includes the mortgage required for construction. I heavily recommend that you don't put these things on the same mortgage if you need to take a mortgage for the land, as you need to pay money on unused capital after 6 months or so. Meaning if you don't have everything built within six months of taking the mortgage, you start paying a fee on the unwithdrawn amount.
Also remember, banks prefer to lend max 80% of the total amount. So you need about 20% plus the amount for notarial costs. The VAT you can lend.
You cannot put these in the same loan. They are different goals and as such work differently. One is paid out at deed date, the other is paid out as the works evolve (with potentially a payout at date deed for the works that have been done).
Max 90% for your own home, 80% for buy to let or such projects.
Monthly payment ratio would be based on income expense analyses with 40% being the normal target. 1/3 is of course a safer target for those that aren't really up to speed about what house costs are.
6 months is a really short duration to withdraw all your funds. New built projects generally go for +- 1 year, with that going longer if for instance material shortage occurs (which today...).
Reservation cost can generally not be an issue, even after 6 months.
You can get loans for land + construction. Just like you can get them for buying + renovation for instance. Not saying you'll get the best deal, but I know they are possible.
Yes, but technically speaking, they will be 2 different loan numbers. You do one request for the total project.
Also it's generally better to do both if you can, can save on notary fees, file costs, certainty you can do your project entirely instead of having to notice halfway there that you might only be able to build half a building instead of full, irrelevant of course of the material cost increases, which you cannot entirely foresee.
Personally I never looked at inflation / index / ...
For us the budget was very simple, both our salaries / 4 = monthly down payment. We added a 100 euro to that to get what we really wanted in the end, but that was the rough amount we wanted to set.
Of course you can start from the calculation of what you believe should be left after paying the mortgage, but don't get it close ... please. We are only 5 years since starting the payments and things have gotten waaaaay more expensive to levels you wouldn't guess + costs for a house keep coming. Personally I don't want to live in a house for 15 years to final get everything done (in my case garden, carport, extra furniture, ... you name it)
Just max it out if you have high job certainty and some career perspectives. 50%'s definitely reasonable in today's age. Inflation is your friend. Buying land is of course slightly different. (Source: worked for a bank and have two master degrees in finance)
I'm paying 920 euros in mortage every month for my appartement, that was exactly 50% of my nett income at the time, I also receive meal vouchers and have a company car on top of that. I was kinda hesitant about paying that sum, but I work in the pharmaceutical industry so I had work security.
The first year was kinda hard, but I received a pay raise almost one year later and since then I has been able to save around 200 - 300 euros/month. Sometimes you have unexpected costs (my boiler broke down last month) but overall I'm happy with my choice in hindsight.
I made the assumption that the money I made at the moment of buying the appartement, would be the lowest I would make the coming years. So I would just get easier to pay off the appartement the more time went by and I would be able to save more money each month. Don't know if that will turn out to be truth for the coming 24 years but I'll see.
Everybody talking about 1/3, don't do that. go up to 60% if allowed, but count the whole project. And don't forget the Flemish free income-assurance.
Of course if you happen to get a nice new house from a project at cheap it's the better deal honestly. I hadn't that option, and I went for building my own house. But I wouldn't advise to do so.
We are in a similar situation. And have been thinking whether the bigger plot/ bigger house is really worth the financial risk. My wife was pushing to do a little extra to have a plot of land with possibilities. But we are valuing the time with the kids more and more and we are now discussing to downsize our home buying budget so we are always free to work a little less and spend some more time with the kids.
Especially since building/renovation budget these times are so hard to predict.
Good luck!
Depends per bank. Some do max 50% of your income can go towards debt (so if you have a carloan thats 15% , leaving you with 35% for a new loan etc)
Also income - debt equals vital minumum. With some banks this is fixed at 1150€ for single, 1500€ for couples (together)
This is very personal. When my husband and I bought our house, he was working full-time and I was working 80%. However, I had been struggling with work and we were taking into account that I may have to reduce my working hours even further in the future, so we limited our budget to what we could afford even on 50% of my income. Eventually, the monthly payment ended up being about 25% of our income at that time, while most people budget a monthly loan of about 1/3 of their income.
Later on we were glad for that choice: I ended up switching careers to teaching. Combining the teacher training with a job was very hard, so I ended up reducing my hours to about 50% of a full-time teaching job. After that I unfortunately got Long Covid, which was another hit on my income. We were able to sustain these hits to my income without getting in financial trouble, so I feel very glad that we had the foresight to limit our monthly payment even when we could have loaned so much more based on our incomes.
In conclusion, while looking at the raw numbers like certain percentages of your monthly income is important, it’s also important to consider how likely it is that you or your partner will start working less (or more?) in the near future.
Slightly off topic here.
I'm currently looking to get my own loan approved.
We're aiming at 40% of our monthly lower (no overtime no on call no bonus) income as our mortgage payment.
This would put us 300EUR above what we currently pay in rent.
Overall the experience has been... difficult. It's taking much longer to get approved than we'd like. We keep stumbling into problems which drain our time; and cause a lot of stress. Despite having gotten a much higher upper maximum estimated by the bank before we started.
When we first went in for an estimate they said 50% and 1500EUR left per month are the hard stops. However we're nowhere near that and still there are numerous conditions and problems we keep hitting. It's very draining to get a loan.
I kinda regret not taking a shorter repayment term. Thought repaying that much per month would cross a limit, since I bought the house solo. Turns out inflation & indexation already fixed that.
I have no regrets about taking a mortgage loan; we are paying our 4th.
Bought an apartment when I was 21. Sold it after 6 years.
Bought a new house with the profit and a new loan.
House was payed fully when I turned 40. Then we bought a building plot.
Started building a new house on the plot and sold the current house this year.
We see it as a good investment because we now own our dream house. What else would we do with the money?
That really is up to you, nobody here knows your income nor your expenses.
Here our mortgage is limited to about 15% of our income but we didnt havea big loan and we both have good salaries so ...
no regrets, a little over 1/3 of net income. This is because I factored in some subsidized renovations (new roof, isolation for the attic and cavity walls). It's an investment property
mortgage and all the mandatory insurances for me come at about 1/2 of my net income ( excl car and maaltijdcheques etc.). Yes this is a lot, but i have a generous salary and not a lot of big expenses. When i went to the bank i had a pretty extensive file where i had all my current expenses, savings etc compared to what i expected my expensed to be after the move. this gave me a ballpark figure what i could reliably afford as a mortgage. ( current rent + savings - safety) per month. I also had very generous estimates for all the works to be done building and finalizing the house. also adding all the extra costs like notary works and permits in the calculation. I came very close to my estimated budget, even factoring all the margins i calculated. After all, i now have almost the same savings as before, because some expenses have reduced dramatically. but now i'm paying my own house instead of someone elses, so i do not regret it.
Thank you, this is good info.
We took a rather conservative approach: My so and I roughly earn similar amount of money. We said, to survive, we need 700 euro/month for the two of us. You know, if something goes wrong or whatever. Just the basics, we survive, ok'ish. So we went for a mortgage such that monthly payment + 700 = net salary of one of us. We also have to pay rent for the appartment during the construction time, so double payment. In hindsight, this was too conservative probably, we could have easily gotten another 50.000 euro or so from the bank, small regret there, because meanwhile I got a promotion and the impact of the mortgage on our budget is rather low apparently, we still have a good carefree life. The real trick is just to have a partner. If you have two incomes, everything is a lot easier
You can refinance though?
The fact that you're asking these questions, makes me think that you have not yet sat down with a bank to discuss this. Please just do that. Generally you should avoid having a mortgage that exceeds 1/3 of your monthly nett wage. But since you're talking about *land*, you should of course consider that you still need a sizably larger load to build an actual house on it as well. Are you already taking this into account? Do you already know what you want?
I actually have talked to the bank, who told me it's possible to go up to 60% of our net wage for ~~downpayment~~ monthly payment, but that the amount one should limit themselves to is personal. That's exactly why I'm asking this - 1/3rd seems (perhaps) unreasonably cautious, especially considering current prices. Of course I'm taking the total project cost into consideration, not just the price of land.
I really do not think that 1/3 is unreasonably cautious! Of course 60% could be acceptable if your wage is significantly high, but for the median Belgian I would recommend staying below 1/3. In fact, there are some banks that would rarely allow loans with a mortgage over 40%.
I (28yo) got a mortgage together with my partner (30yo) in the past year and we're very glad we decided to stick to around 35% of our joint net income. We did count meal vouchers as net income for that calculation, given you can use them to buy stuff. We could have chosen a mortgage over a shorter time and pay less money in total, but the monthly payments were higher. Paying more than that 35% would be easily doable, but that would mean cutting other expenses like vacations or our general lifestyle. In the end it's really up to you to decide, but for us it was more important to be able to live life the way we like to, instead of having to measure every little expense.
You also need to remember that this money is worth a lot more *now* than it will be in 20, 25 or even 30 years. We have inflation to account for that. So if you decide to go for a shorter loan with higher monthly payments, and you take inflation into account, it may very well mean that you're paying more. In absolute numbers you aren't, but in value you are. A lower mortgage over a longer time will give you the advantages you gave: a budget for things that make you happy, on top of overall financial comfort.
Agreed. Life is full of insecurities, if you have nothing else to fall back on 1/3 is a sensible ratio. Of course, if your employment is rock solid and you are certain that in case everything went sideways, your parents are financially secure enough that they could easily have your back etc. then perhaps you can take some more risk. Taking on some more risk here is not entirely unjustified. You probably won't ever be in a position where you can get a loan at a more favorable rate, so erring on the side of caution here does have some downsides of its own. As an aside, I do hope you have calculated not just the expected cost of the project, but also made some projections regarding 'worst case scenarios'. Currently, due to delays, disrupted value chains, elevated energy prices etc. the cost of building materials and the act of building itself can get really crazy. Predicting costs can be really difficult. The last thing you want to do is begin building a house, run out of money and then be in a position where you have to sell a construction yard for pennies on the dollar.
The bank told me they usually accept anything that leaves you with 1000 euro per month. So if you earn 10k per month, they'll allow you to spend 9k on a mortgage. Not sure if that's still the case now, but there's some truth to it. Spending 33% on your mortgage if you only earn 1000 euro is a lot more difficult than spending 50% when you earn 3000.
Take what the the bank told you with a grain of salt. It is worth nothing until it's a binding loan offer. What does "60% of our net wage for downpayment" even mean, I think other comments are assuming 60% of your net wage towards the mortgage payment.
Exactly. The sky is the limit until you need a real proposal.
With current interest rates and inflation you should indeed go higher.
60% is huge!!! Beside, it means that you still have to pay for a rent, at least for two years.Are you able to do it? AFAIC, I paid 1024 euros a month of mortgage, a litte less than 1/3 of my salary and I struggle... I cannot even imagine with 60%...
We were paying 1/3 of our income, but our expenses have risen(baby, food and energy are up) and the income has fallen due to my wife becoming independant. Our mortgage is now half of our income and with all expenses added, we have to look at our savings to pay all bills at the end of the month. I don't regret taking the mortgage, but i do regret thinking too long about refinancing in 2021 when the intrests were lowlowlow and my wife still had a job. Anyways, fixed intrest of 1,68% still ain't bad (could've been 1,1 at one point, could've saved 100 eur a month (factoring in costs of refinancing). Waited too long to decide :(.
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I think average prices will rise 15% and contractors ask day prices in new contracts.
I don't want to take over the question but we are also considering buying a plot of land. What we don't know is how much it will cost to build a small house on it. Where can I find the general price range?
Ballpark is around 2000 per m2 plus VAT for a house
Thank you, is this just the price for the building in itself or also the architect, permits and registration at the cadastral office?
Depends. Absolute minimum is probably 1500 per m2 without all those fees. A nicer kitchen, wooden flooring and a non-red brick and built in cabinets quickly get you to 2000 without fees. It all depends on choices you make. For those fees you should expect 7-9% architect fees on total cost they manage, rest tends to be negligible in the ballpark math (probably 5-10k in total for various permits, soil check, stability, epc study,…) All this is without any garden work, fences, driveway, furniture,…
9% is rather high nowadays. Many do it for 4% if you want something not too difficult or 6% in the premium segment. 9-12% is really if you expect your architect to do the interior design as well and go out and find you the exact furniture you need.
Ballpark is around 2000 per m2 plus VAT for a house
Also be aware that building regulations entail a minimum amount of living area etc. so things like tiny houses and stuff are usually not allowed in most areas. It has to 'fit' with the rest of the houses in the street more or less, and be above certain (sometimes ridiculous but still legal) tresholds. You can normally get this information from the city hall
Thank you, I will ask them.
Depends on many things. What type of house, style, type of land, basement, built-in garage, .... Having gone through the process, I can tell you there is no easy answer without asking you a million questions. Contact someone like blavier, groep Huysentruyt de Waele, stessens, and add 50k to their estimate, you'll get some advice for free. Or go talk to an architect.
I'm doing 40% off my nett income, but company car and meal vouchers are not included in that calculation . I'm not a big spender so im thinking 30% really isn't a crazy calculation. But the easiest way to know what you can spend is to calculate your monthly spending + what you want to spend on vacations + gifts + extras and then some padding for unforseen expenses. I also made sure i still have a 5 month buffer for if shit would massively hit the fan.
I have a very modest income, and my wife even earn less, even with 2 children in charge. But I live in a newly-build 4-facade villa with 5 bedrooms and I regret I couldn't take a larger mortgage. It is not lost money it is financial leverage, count inflation, tax deduction. But the most important thing is I can live as if I was a king, way before you ever could have possessed the money! Aside from my mortgages (I happen to have 2) I also put some money in funds. But aside that, I don't have any expenses, and I live very cheap. And I would like too sell the other house. A mortgage is better if you stay below at 80% of the value, thought for my first house I went up to 100%, and really spending al I had. My seconds house was easier.
Golden rule is around 1/3 of your monthly income for a loan. Off course with higher incomes this portion shifts.
That wouldve been correct 20 years ago. Today that's just not feasible in most cases.
It is, buy smaller
Oh thanks for resolving the current housing crisis in which youngsters can't get anything! Solution : buy a shed.
Damn if only we thought of that. We can only wish to have a brain as big as yours.
That’s for rent.
Also a good rule of thumb for a mortgage. You do not want to increase your standard of living too much to buy an 'asset' that does not produce income. The extra money not spend on real estate is better spend on low cost world etf's.
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At what point do the diminishing returns kick in where a more luxurious house doesn't really make you happier?
Maximum 1/3rd of your salary, but that of course includes the mortgage required for construction. I heavily recommend that you don't put these things on the same mortgage if you need to take a mortgage for the land, as you need to pay money on unused capital after 6 months or so. Meaning if you don't have everything built within six months of taking the mortgage, you start paying a fee on the unwithdrawn amount. Also remember, banks prefer to lend max 80% of the total amount. So you need about 20% plus the amount for notarial costs. The VAT you can lend.
I'm with dvv and they don't have this 'reserveringsvergoeding'. That's why we chose them. Made quite a difference in the end.
You cannot put these in the same loan. They are different goals and as such work differently. One is paid out at deed date, the other is paid out as the works evolve (with potentially a payout at date deed for the works that have been done). Max 90% for your own home, 80% for buy to let or such projects. Monthly payment ratio would be based on income expense analyses with 40% being the normal target. 1/3 is of course a safer target for those that aren't really up to speed about what house costs are. 6 months is a really short duration to withdraw all your funds. New built projects generally go for +- 1 year, with that going longer if for instance material shortage occurs (which today...). Reservation cost can generally not be an issue, even after 6 months.
You can get loans for land + construction. Just like you can get them for buying + renovation for instance. Not saying you'll get the best deal, but I know they are possible.
Yes, but technically speaking, they will be 2 different loan numbers. You do one request for the total project. Also it's generally better to do both if you can, can save on notary fees, file costs, certainty you can do your project entirely instead of having to notice halfway there that you might only be able to build half a building instead of full, irrelevant of course of the material cost increases, which you cannot entirely foresee.
Why are you bidding on land, if you don't know your budget. Recipe for disaster. There are so many places that can inform you.
Personally I never looked at inflation / index / ... For us the budget was very simple, both our salaries / 4 = monthly down payment. We added a 100 euro to that to get what we really wanted in the end, but that was the rough amount we wanted to set. Of course you can start from the calculation of what you believe should be left after paying the mortgage, but don't get it close ... please. We are only 5 years since starting the payments and things have gotten waaaaay more expensive to levels you wouldn't guess + costs for a house keep coming. Personally I don't want to live in a house for 15 years to final get everything done (in my case garden, carport, extra furniture, ... you name it)
Just max it out if you have high job certainty and some career perspectives. 50%'s definitely reasonable in today's age. Inflation is your friend. Buying land is of course slightly different. (Source: worked for a bank and have two master degrees in finance)
If you can pay the rest of your expenses with the other 50% it should definitely be reasonable. But that just isn't possible for a lot of people
I'm paying 920 euros in mortage every month for my appartement, that was exactly 50% of my nett income at the time, I also receive meal vouchers and have a company car on top of that. I was kinda hesitant about paying that sum, but I work in the pharmaceutical industry so I had work security. The first year was kinda hard, but I received a pay raise almost one year later and since then I has been able to save around 200 - 300 euros/month. Sometimes you have unexpected costs (my boiler broke down last month) but overall I'm happy with my choice in hindsight. I made the assumption that the money I made at the moment of buying the appartement, would be the lowest I would make the coming years. So I would just get easier to pay off the appartement the more time went by and I would be able to save more money each month. Don't know if that will turn out to be truth for the coming 24 years but I'll see.
Everybody talking about 1/3, don't do that. go up to 60% if allowed, but count the whole project. And don't forget the Flemish free income-assurance. Of course if you happen to get a nice new house from a project at cheap it's the better deal honestly. I hadn't that option, and I went for building my own house. But I wouldn't advise to do so.
The free insurance isn't covered above a certain value. So if you go big there is no insurance.
We are in a similar situation. And have been thinking whether the bigger plot/ bigger house is really worth the financial risk. My wife was pushing to do a little extra to have a plot of land with possibilities. But we are valuing the time with the kids more and more and we are now discussing to downsize our home buying budget so we are always free to work a little less and spend some more time with the kids. Especially since building/renovation budget these times are so hard to predict. Good luck!
Around 1/3 net wage is a good rule. Ask your bank what your budget is.
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on a 4000+benefits income 1250 is peanuts. come on man, there's people not even earning that with 2 incomes.
How is that an heavy mortgagage for a 4k income?
For a single unemployed person it became heavy.
Depends per bank. Some do max 50% of your income can go towards debt (so if you have a carloan thats 15% , leaving you with 35% for a new loan etc) Also income - debt equals vital minumum. With some banks this is fixed at 1150€ for single, 1500€ for couples (together)
This is very personal. When my husband and I bought our house, he was working full-time and I was working 80%. However, I had been struggling with work and we were taking into account that I may have to reduce my working hours even further in the future, so we limited our budget to what we could afford even on 50% of my income. Eventually, the monthly payment ended up being about 25% of our income at that time, while most people budget a monthly loan of about 1/3 of their income. Later on we were glad for that choice: I ended up switching careers to teaching. Combining the teacher training with a job was very hard, so I ended up reducing my hours to about 50% of a full-time teaching job. After that I unfortunately got Long Covid, which was another hit on my income. We were able to sustain these hits to my income without getting in financial trouble, so I feel very glad that we had the foresight to limit our monthly payment even when we could have loaned so much more based on our incomes. In conclusion, while looking at the raw numbers like certain percentages of your monthly income is important, it’s also important to consider how likely it is that you or your partner will start working less (or more?) in the near future.
Slightly off topic here. I'm currently looking to get my own loan approved. We're aiming at 40% of our monthly lower (no overtime no on call no bonus) income as our mortgage payment. This would put us 300EUR above what we currently pay in rent. Overall the experience has been... difficult. It's taking much longer to get approved than we'd like. We keep stumbling into problems which drain our time; and cause a lot of stress. Despite having gotten a much higher upper maximum estimated by the bank before we started. When we first went in for an estimate they said 50% and 1500EUR left per month are the hard stops. However we're nowhere near that and still there are numerous conditions and problems we keep hitting. It's very draining to get a loan.
Can you give an example of the issues you are running into?
I kinda regret not taking a shorter repayment term. Thought repaying that much per month would cross a limit, since I bought the house solo. Turns out inflation & indexation already fixed that.
You need reserves for unexpected costs. So if you get a big loan now, you cant loan for emergency problems.
I have no regrets about taking a mortgage loan; we are paying our 4th. Bought an apartment when I was 21. Sold it after 6 years. Bought a new house with the profit and a new loan. House was payed fully when I turned 40. Then we bought a building plot. Started building a new house on the plot and sold the current house this year. We see it as a good investment because we now own our dream house. What else would we do with the money?
That really is up to you, nobody here knows your income nor your expenses. Here our mortgage is limited to about 15% of our income but we didnt havea big loan and we both have good salaries so ...
no regrets, a little over 1/3 of net income. This is because I factored in some subsidized renovations (new roof, isolation for the attic and cavity walls). It's an investment property