A young borrower spends an average of 36 percent of his income on a home-buying loan: Buyers pay this amount monthly | MyGuide

In 2019, the National Bank of Belgium directed commercial banks to exercise extra caution when granting mortgage loans. For the majority of loans, they will only be allowed to lend 90 percent of the value of the property to be financed, with the borrower having to pay the remaining 10 percent and any additional costs to a notary and the like out of out of pocket.

However, this procedure is not very strict in practice. Businesses are allowed to lend more than 90 percent of the property value against 35 percent of their mortgage loans. 5 percent of it, even more than 100 percent. In this way it can help, for example, young families who have little savings.

Do you have an eye on a house? Simulate how much you have to pay each month to get a mortgage

However, as a borrower, it is a good idea to try to stay below 90 percent. You often get a better interest rate than if you had to borrow more.

So do most borrowers. People who take out a loan to buy or build a home are now paying a larger portion of the cost out of their own money. At the market leader BNP Paribas Fortis, which nevertheless accounts for a quarter of all mortgage loans in our country, an average of 73 percent of the property value was borrowed in 2021, compared to 74 percent in 2020. This was even more evident For young people under the age of 30. They borrowed an average of 82 percent instead of 86 percent of the value of their property.

On the other hand, as a borrower, you have to make sure that you don’t put your last savings into your home. It is better to keep something on hand in case of financial setbacks.

advice† Show here what others have to pay each month for their loan

But how much do most borrowers borrow now? This, of course, depends on their family situation. At BNP Paribas Fortis, a quarter of all mortgage loans last year went to youth up to the age of 30. They borrowed an average of 86 percent of the value of their property. And that fell to 209 thousand euros. They are now paying them in monthly installments at an average of €864. The average loan term is 272 months. 36 percent of their income goes to their premiums.

At the other end of the age spectrum are the over 55s. Last year they signed 7 percent of all mortgages with the nation’s largest bank. On average, they borrowed only 51 percent of the value of their holdings. Since they already had a full professional career behind them, most of them were able to make a great contribution on their part. Their repayment amounts to an average of 867 euros per month, and the repayment period is limited to an average of 114 months.

The big group is also the group of bachelors. In 2021, that was good for a one-in-three home loan with BNP Paribas Fortis. They borrowed an average of 68 percent of the value of their holdings, which was usually smaller than those of large families. The average loan in this category was 177 thousand euros, the average repayment was 775 euros, and the average repayment period was 218 months. On average, 39 percent of a borrower’s income goes to paying off his loan.

Anyone considering a loan should be able to say with a high degree of certainty – no matter what category they fall into – that they can handle the payments. More important than the percentage of income he/she has to spend on the loan, is the absolute amount that remains each month after the installment to cover all other expenses.

Want to test how much you can pay off? Then check how much you can save each month after settling all your other expenses. You can spend this amount on repaying the loan. Build in a buffer zone.

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