How much can I borrow for a mortgage? The rules banks don't say out loud

There are two different numbers: how much the bank will lend you and how much you can afford. Banks calculate according to regulatory limits — but those were created to protect the banking system, not your budget. The bank's maximum is therefore not a recommendation.

The short answer

• Total debt is capped against your net annual income (DTI). The multiple is set by your country’s regulator and often depends on age as well.
• Repayments on all your loans must stay below a set share of income (DSTI) — and the bank tests them at a higher rate than the one you pay.
• A mortgage will not cover the full property value (LTV); the rest is your own down payment. The familiar “the bank only lends part of the value” is often something else: a band threshold that only a share of the bank’s loans may fall into, not a cap on you.
• A practical rule: the repayment shouldn't exceed 30–35% of the household's net income — even if the bank allows more.

How the bank calculates

• DTI (Debt-to-Income): the sum of all your debts must not exceed a multiple of your net annual income. Credit cards and overdraft limits count as debt too.
• DSTI (Debt Service-to-Income): monthly repayments vs. income — the bank also stress-tests whether you can handle the repayment at a higher rate.
• LTV (Loan-to-Value): the ratio of the loan to the property value according to an expert appraisal — not the purchase price.
• Income: a permanent employment contract counts for more with the bank than self-employment with the same income. The self-employed usually document income with a tax return.

Why not to take the maximum

• The fixed-rate period ends — at a higher rate the repayment can grow by tens to hundreds of euros a month.
• Life changes: children, losing one income, health. A budget stretched to the limit has nowhere to give.
• On top of the mortgage come costs the calculator ignores: furnishing, repairs, insurance, higher utilities.

Three steps before visiting the bank

• 1. Calculate your own ceiling: 30–35% of the household's net monthly income is your maximum repayment.
• 2. Test yourself: live for 3 months while setting aside the amount of the future repayment. If it hurts, the mortgage is too big.
• 3. Compare offers from several banks — a 0.3% difference in the rate on a €150,000 mortgage means thousands of euros over the fixed period.

Try it in the simulator

In the Ferrata simulator you can walk through the mortgage decision for real — including what the end of the fixed-rate period does to your budget. No registration, free.