Housing
How much you can spend on housing without struggling every month
Before you set your sights on a specific home, it helps to know how much you can spend on housing without the rest of your finances suffering. The monthly payment is only part of the calculation.
The 35% rule (and its limits)
A common benchmark is that your mortgage payment shouldn't exceed 35% of your net income — it's also the limit banks typically apply when approving a mortgage. But it's a ceiling, not a target: the further below 35% you stay, the more room you'll have for unexpected costs, savings, and everything else.
The costs people forget to calculate
Beyond the monthly payment, buying a home involves taxes (transfer tax or VAT depending on whether it's a resale or new build, plus stamp duty), notary, registry, and processing fees — roughly an extra 10-12% of the purchase price, on top of the down payment. And once you own it: community fees, property tax, home and mortgage-linked life insurance, and maintenance.
How much down payment you really need
Banks typically finance up to 80% of the appraised value (sometimes more for a first home). That means you need at least 20% saved, plus the 10-12% in fees and taxes — around 30% of the home's price in savings before you take the step.
Fixed vs. variable rate, and which to choose
A fixed rate gives you a stable payment for the life of the mortgage, useful if you prefer predictability. A variable rate usually starts lower but can rise with the reference rate — before choosing variable, calculate whether you could handle the payment if the interest rate rose 2-3 points.
Before signing, simulate a few scenarios
What happens if one of you loses their job for a few months? What if you have a child and income drops temporarily? Simulating these scenarios before committing to a specific payment gives you a real sense of how much room you have — not just whether you "can manage" with today's income.
Frequently asked questions
Is the 35% based on gross or net income?
On net income (what actually lands in your account each month), not gross salary — it's the figure that truly reflects what you have available.
Does an annual bonus count toward the percentage?
It's safer to calculate it only on regular monthly income, without counting bonuses, so the payment stays sustainable even in months without one.
Is it better to put down a bigger down payment or keep money for emergencies?
It depends on your situation, but as a general rule: don't drain your emergency fund to zero just to increase the down payment. Make sure you keep some liquid buffer for unexpected costs first.
How does the mortgage term affect what I can afford?
A longer term means a lower monthly payment but more total interest paid over the life of the mortgage. It's a trade-off between what you can pay each month and the total cost of the loan.
Put it into practice
Enter your income, savings, and the home you're interested in, and see whether it fits your finances: