Owning property with a net income of 3000 euros – is that possible?

What chances do average earners have of fulfilling their dream of owning their own home in times of rising interest rates? Many prospective homebuyers have become more hesitant since the interest rate turnaround. But is real estate truly no longer affordable for average earners?

The dream of owning a house or apartment often falls apart at the bank. But what is actually possible with a net income of around 3000 euros per month?

Buying a house with a net income of 3000 euros – that's how expensive it can be

Experts advise that the monthly mortgage payment should not exceed 40 percent of net income. Some banks even limit mortgage loans to a maximum of 30 percent of net income.

Assuming a financing plan over 25 years with a monthly payment of 873 euros, an interest rate of 2.5 percent and 20 percent equity, the approximate maximum price for the property is 210,000 euros.

Equity capital is essential

The costs of buying real estate include the purchase price of the property as well as additional expenses such as real estate agent fees, property transfer tax, notary fees, and land registry fees. These can amount to 10 to 15 percent of the purchase price, depending on the state. For a property costing €200,000, buyers should expect to pay approximately €20,000 in additional costs. These are generally not financed by banks and must be paid from the buyer's own funds.

What kind of interest rate can one expect?

The loan amount depends not only on the property price but also on the available equity. Financing experts advise covering at least 20 percent of the purchase price yourself. Furthermore, the interest rate must also be considered when financing a property. Currently, this is around 3.5 percent for a 10-year loan. However, this interest rate can vary depending on the loan amount and the equity contributed.

Real estate financing with a net income of 3000 euros: What else is important

Renovation costs and potential income losses due to unemployment, illness, or parental leave should also be carefully considered before taking out a loan. It is advisable not to set the monthly payment too high in order to have enough money left over for savings at the end of the month. The information on real estate financing in this article is for guidance only and is non-binding. For personalized advice, we would be happy to connect you with a qualified financial advisor from our network.

You want to fulfill your dream of owning your own property? Contact us! We would be happy to advise you and support you in finding the right property.

Notes

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

Photo: © elenathewise/Depositphotos.com