Housing loan amount based on annual income?

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pavi
Posts: 50
Joined: Fri Jan 13, 2012 8:57 pm

Housing loan amount based on annual income?

Post by pavi » Wed Jan 17, 2018 1:21 pm

We are planning to buy a house in Finland. Is there any thumbrule as to:
What is the multiplier to annual income for ending up with total loan that banks can give?
I am aware that banks look at monthly payment + some amount reserved for other expenses + other loans, but still would like to check if there are some multipliers so we can calculate what amount of loan we can expect from banks?



Housing loan amount based on annual income?

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betelgeuse
Posts: 2719
Joined: Thu Aug 29, 2013 1:24 am

Re: Housing loan amount based on annual income?

Post by betelgeuse » Wed Jan 17, 2018 2:07 pm

pavi wrote:
Wed Jan 17, 2018 1:21 pm
We are planning to buy a house in Finland. Is there any thumbrule as to:
What is the multiplier to annual income for ending up with total loan that banks can give?
I am aware that banks look at monthly payment + some amount reserved for other expenses + other loans, but still would like to check if there are some multipliers so we can calculate what amount of loan we can expect from banks?
The monthly payment should be under 40% of net income.


Ozmotix
Posts: 13
Joined: Thu Oct 06, 2016 9:49 pm

Re: Housing loan amount based on annual income?

Post by Ozmotix » Fri Jan 19, 2018 12:29 pm

hi

If you want to have a rough idea, try to use the calculator banks have on their websites. You could go with a percentage of monthly net income and 25 year period and see what you get. I think %40 betelgeuse suggested is the maximum, aiming for something like %30 would be more realistic.

I recently negotiated a loan myself, so if you are like me (not Finnish or EU citizen and have A type residence permit), I advise you not to waste your time going to a lot of banks (which Finns usually do to get the best offer). Try OP first and see what they offer. Other large banks I have dealt with all had problems with me not having a permanent residence permit or citizenship. But your situation might be different I don't know.

In my case interest rates were almost same in every bank (something like euribor + 0.7 %), so I chose OP because of their bonus system. It is also probably a good option to go with the bank you have your accounts now.


pavi
Posts: 50
Joined: Fri Jan 13, 2012 8:57 pm

Re: Housing loan amount based on annual income?

Post by pavi » Wed Jan 24, 2018 2:43 pm

Thank you both. It helps :thumbsup:


pavi
Posts: 50
Joined: Fri Jan 13, 2012 8:57 pm

Re: Housing loan amount based on annual income?

Post by pavi » Wed Jan 24, 2018 4:00 pm

Still a question, any idea what are the ongoing marginals on top of 12 month euribors?
Is there a possibility to change from 12 month euribor to some other euribor as in the past?
How does the above situation change if I already have a loan and would like to get a new loan and try to sell the old house? Complicated for me to think of how to manage this.

Pavi


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