How much you can borrow depends on several factors, including your income, the value of the property, your expenses, and your personal financial situation. Here are key points to consider:
- For Mortgages (Netherlands example):
You can borrow up to 100% of the property's value. The maximum mortgage amount is mainly determined by your income and the property's value. Fixed allowances and benefits can also be included if they are stable and long-term
- Income Multiples (UK example):
Typically, lenders cap borrowing at around 4.5 times your annual income, but this is not guaranteed and varies by lender. Your monthly expenses and other financial commitments reduce the amount you can borrow
- Personal Loans:
For personal loans (not mortgages), borrowing limits vary widely. For example, ABN AMRO offers personal loans between €5,000 and €75,000, with the exact amount depending on your income, family situation, and fixed costs
- Other Considerations:
Lenders assess your employment status (permanent or temporary contract), your existing debts, and your ability to make repayments without financial strain
- Use Calculators:
Many banks and financial institutions provide online calculators to estimate how much you can borrow based on your income, expenses, and property value. These tools give a rough estimate but final approval depends on detailed credit checks and underwriting
In summary, the amount you can borrow depends largely on your income, expenses, and the value of the asset you want to finance. Using mortgage or loan calculators from your bank or trusted financial websites can give you a quick estimate tailored to your situation.
