Mortgage affordability calculator: What house can I afford?

19 April, 2023 | Alba Tebar

“What house can I afford?” is probably one of the most common questions of all times. However, it is quite difficult to come with an appropriate answer, as people tend to not have enough information about this topic. For that reason, online tools can be pretty useful in helping you to solve all your doubts. Possibly, mortgage calculators are the most useful ones: you can find them online for free, and they will quickly tell you how affordable a house is depending on your personal details and economic situation.

At this stage, it is necessary to mention our mortgage affordability calculator. It is completely free and very easy to use: you only have to fill in the gaps with some personal information about the house you want to buy, such as its location or its price, and in a few seconds our online calculator will tell you if you’ll be able to afford it or not. By this way, you will avoid getting into trouble as well as losing effort, time and money into a project that beforehand you know will go nowhere.

Furthermore, in Hipotecasplus we are mortgage brokers that will guide and advise you when it comes to mortgage affordability. We’ll know what you’ll exactly need according to your personal preferences and interests, so we will work to get what you really deserve.  It is not always easy to get the best mortgage on the market, especially if you come from another country. However, with our team’s help, we can assure you that your dream house is about to become a reality!

How does our calculator work?

As we have previously explained, using our online mortgage calculator is simple and easy. You only have to fill in with some personal details about yourself and the house you want to buy, and the calculator will make an estimation of what you can afford.

With just one click, you can discover in less than 1 minute the degree of feasibility of the mortgage operation that you want to do. More specifically, you will be asked about the price and location of the property, as well as your income or personal loans.

Either way, in Hipotecasplus we recommend that you consult this information with experts in the sector like our team, in order to find out which mortgage options will suit better with your personal needs and interests. By this way, you will be able to get the most affordable prices and the most beneficial prices of all times. So, don’t think twice and get in touch with us: we will be more than happy to help you!

What to calculate?

As you might have seen if you are actively searching for a new house, you have to do some calculations beforehand. Depending on the specific needs of the moment and the context, you’ll have to be careful on the following steps:

• Before asking the bank entity for a mortgage. If you want to make a good impression of yourself, be careful and check beforehand which mortgage you could afford. Banks are usually quite exigent, so if you have not a wide margin of economic comfort to afford a house, they will not grant you the mortgage.

• Once you’ve obtained the best mortgage for you and your family. After all that difficult process (in which you can be helped by Hipotecasplus, remember!) It is also interesting to calculate how much you’ll have to pay when it comes to extra expenses associated with the mortgage.

Which elements determine your mortgage affordability?

There are three elements that are fundamental in terms of affordability: your income, your savings and your loan repayment term. Let’s explore them.

In that sense, Bank of Spain recommends that the mortgage installment does not exceed 35% of your monthly income, although in large cities where housing is more expensive, it can reach up to 40%.

Focusing on savings, banks finance up to 70% of the transaction cost for non-residents, so it is important that you also have the remaining 30% saved. However, remember that this 30% is not enough: you’ll need to take into account further expenses and factors of the sale.

Beside, and as we have said, your loan repayment term will play a key role in calculating your mortgage affordability. The longer this period is, the lower the amount you will have to pay to the bank every month. Nevertheless, remember that repaying your debt in a longer time does not have to be the best option for you, since other factors such as the interest rate come into play.

So, the longer the payment term, the more interest you will end up paying, and therefore the more “expensive” you will end up leaving the mortgage. In addition, the factor of uncertainty is added: if you borrow for a long term, it is more likely that unforeseen events or surprises will arise along the way.

As a resume, the most important factors to consider when studying your mortgage affordability are: the price of the property, your savings and income, and the number of years you’ll have to pay back the mortgage.

Anyway, do not panic! In Hipotecasplus we will do that work for you and will tell you exactly which degree of affordability you’ll face, depending on your profile and your house. What’s more, counting on a mortgage affordability calculator like ours is a guarantee of success!