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El Cerebro

Mortgage and housing

How much they will lend me for a home

The property price your numbers get you: the highest one that can be sustained with the part of your payment you can commit, with what you have saved and with the rate and the term you expect.

What it does

It starts from your monthly net income, subtracts the payments on the debts you already have, and applies the repayment-effort percentage you type. With that available payment and the interest rate and term you entered, it calculates how much capital could be repaid. That capital, converted into a property price, is a ceiling. It then does the same on the other side: what price your savings allow, once the down payment and the purchase costs are paid. The figure that comes out is the lower of the two ceilings. The detail shows both separately and says which of the two binds.

With the default values —3.000 € of income, 200 € of debts, 60.000 € saved, 3 % interest over 30 years, 35 % effort, 80 % financed and 10 % costs— the savings ceiling comes out at 200.000 € and the income ceiling at 252.013 €. The savings bind. The price your numbers get you is 200.000 €, with a loan of 160.000 € and a payment of 674,57 € a month.

Key concepts

  • Effort: the share of your income that you dedicate to the payment. It is an assumption that you type, not a figure from any lender and not a legal threshold. It changes the result more than any other input, and that is why the field says so in its label.
  • LTV or financed percentage: the share of the price the bank finances. It is another assumption. What is not financed has to be put in, along with the purchase costs, before applying for the loan.
  • The two ceilings: the price your payment can bear and the price your savings can bear. They are almost never the same, and the lower one binds. That is why the page shows both: a number with no indication of where it comes from looks like a promise, and it is not one.
  • Constant payment: the calculation assumes the payment is the same throughout the term, which is what the French system does. A loan at a variable rate with reviews changes; the detail reminds you of that and the page does not project reviews.
  • Total cost: lengthening the term lowers the payment and raises what is repaid in interest. The price-by-years curve shows one thing and its opposite: more years mean a higher price… until it runs into the savings ceiling. From there on, lengthening it buys nothing.
  • Rate entered: the interest rate you type is your own assumption, not an official rate. The calculator brings no reference rates, does not estimate the one you would "get", and does not know what criteria each lender applies.

Frequently asked questions

What is the difference between the price given by the payment and the one given by the savings?

They are two different ceilings, and the lower of the two is the result. The income one comes from the payment you can sustain each month at the rate and term you set. The savings one comes from dividing what you have saved by the share of the price that is not financed plus the purchase costs. With 3.000 € of income and 60.000 € saved, the first account reaches 252.013 € and the second 200.000 €: the savings bind. Raising the savings moves the second ceiling; raising the income moves the first.

What happens if the debts I already pay eat up the payment?

If the payments on other loans exceed the share of your income that you dedicated to the mortgage, the account returns 0 and says so: no payment is available. The detail shows the exact amount that is missing, which may be negative, so you can see which of the three inputs needs reviewing. It is not clipped to zero, because a zero there would look like a result rather than a problem.

Is 35 % effort a figure or an assumption?

It is an assumption, and the field label says so in parentheses. There is no legal effort threshold in Spanish mortgage lending: that percentage is a calculation rule that you type. With the same salary, 25 % and 45 % give very different prices, and that is why the account shows the available payment behind the percentage.

And the percentage the bank finances?

That is an assumption too, and the field label says so. With 80 %, that is a 20 % down payment, and 10 % costs, 30 % of the price comes out of your pocket before the bank lends anything: that is why 60.000 € of savings reach a 200.000 € home. As the financed percentage rises, the required down payment falls and the savings ceiling rises, but so does the loan.

What happens with 100 % financed and zero costs?

The denominator for the savings is the share of the price that is not financed plus the purchase costs. With both at zero that denominator is zero, and the savings stop setting any ceiling: there is nothing to put in the denominator. The page shows this as an explained infinite ceiling, without pretending it is an enormous number, and the result then depends only on the payment. It is a limiting case of the model, not an operation that exists.

Does lengthening the term mean they lend me more?

With the same payment, more years mean more capital, so the price given by the payment rises. But that curve flattens as soon as it hits the ceiling imposed by the savings: from that point on, lengthening it gives no more price. What does change is the total cost in interest. The chart curve shows where the cap occurs, which is the part of the answer that is not visible in a single number.

What limits do the fields accept?

Net income runs from 0 to 100.000 € a month, payments on other debts from 0 to 50.000 €, savings from 0 to 5.000.000 €, the interest rate from 0 % to 15 %, the term from 1 to 40 years, effort from 10 % to 60 %, the financed share from 10 % to 100 % and purchase costs from 0 % to 20 %. An empty field does not equal zero: the page distinguishes between not having filled in the savings and having typed a 0, which would be two very different situations.

Is this a loan offer or a recommendation?

It is neither an offer nor a recommendation: it is an account built on the numbers you type. Effort and the percentage the bank finances are assumptions, not what any lender grants, and the page does not know what criteria each one applies nor what valuation it would carry out. With these numbers you can arrive at a high price to which not one euro of credit may correspond. The decision, and the enquiry to the lender, belong to whoever reads it.

What happens with my income and my savings?

They do not leave the browser. The numbers are calculated on the page and are not sent, not stored and not written into the address: that is why this calculator cannot be shared with a link. There is no sign-up, no user account and nothing that receives what you type. The entire account is resolved on your own device.

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