Calculate your borrowing capacity to make a credit of 250 000 euros
If you wish to borrow 250 000 €, it is probably that you already have a real estate project in mind. To know the amount of salary necessary to grant such a loan, you must first analyze your borrowing capacity. The latter designates the maximum amount that the bank will be able to lend you according to different criteria:
The total amount of your fixed income: salaries, industrial and commercial profits, property income, retirement pensions, etc.
The amount of your personal contribution: this amount corresponds to the personal sum of money that you wish / can inject in your real estate project.
The amount of expenses you have to bear every month (energy bills, consumer credit, car credit, etc.).
Because by taking out a real estate loan, you are adding monthly payments to your budget, the bank will analyze your project in order to ensure your financial equilibrium and avoid any situation of overindebtedness. The borrowing capacity is limited in order to avoid this risk. This is called the debt ratio.
Calculate your debt ratio for a credit of 250 000 euros
Whether you want to buy a primary or secondary residence or whether you plan to invest in rental property, you will have to respect a debt ratio of 33% in most cases. This debt ratio means that your expenses must not represent more than one third of your income. However, in certain situations, an organization may agree to grant a loan beyond the 33% debt ratio. This is particularly the case for very high incomes.
To calculate your debt ratio, a formula exists: Expenses / income x 100 = debt ratio
Let's take the example of a couple with a total net monthly income of € 3,200. They have to pay monthly payments of 250 € for their car loan and 800 € for their mortgage. Their total expenses are therefore €1,050. Their debt ratio is 32.81%, which is just below the authorized limit.
Borrowing 250,000 euros: the salary required
The salary required to borrow €250,000 will largely depend on the duration of the loan.
For a real estate loan of 250 000 € over 10 years, the monthly payments will be 2 080 € on average, and the salary required will be 6 920 €.
For a real estate loan of 250 000 € on 15 years, the monthly payments will be 1 390 € on average, and the necessary salary will be 4 630 €.
For a real estate loan of 250 000 € on 20 years, the monthly payments will be 1 040 € on average, and the necessary salary will be 3 460 €.
For a real estate loan of 250 000 € over 25 years, the monthly payments will be 830 € on average, and the necessary salary will be 2 760 €.
For a real estate loan of 250 000 € over 30 years, the monthly payments will be 695 € on average, and the necessary salary will be 2 315 €.
Warning: these figures should be taken with care, as they do not take into account the costs and insurance inherent to any real estate loan.
The sources of income analyzed to borrow 250 000 euros
The salary is not the only source of income taken into account by the banks. Moreover, it is quite possible to borrow money while being self-employed. However, you must take into consideration that, depending on your professional status, not all of your income will be taken into account. Indeed, while income from a permanent contract is taken into account in its entirety, income from a self-employed activity is generally only taken into account up to 50%, and this after a minimum of three years of service. Similarly, salaries received on fixed-term, contract or temporary contracts are taken into account according to an average established over the last three years.
Translated with www.DeepL.com/Translator (free version)