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News
How long would you have to save for, in order to get a mortgage?
 26

  JUL

How long would you have to save for, in order to get a mortgage?

If you want to buy a house and need to apply for a mortgage, you may be wondering: how much time do I have to save to apply for the loan?

The answer depends on variables such as age, salary and the value of the home you want to buy. You should also consider your daily expenses for rent, car, insurance, etc., since all of this influences your ability to save.

We are going to analyze each aspect and make an approximate calculation of how many years an average citizen should save to buy a home in Spain.

1. The salary. The latest data published by the INE, corresponding to the year 2019, show that on average, a Spaniard earns 24,395 euros per year.

2. The mortgage. According to said body, the average value of a mortgage in our country amounts (March 2022) to 145,715 euros.

3. The entrance. Considering that banks usually grant up to 80% financing of the total value of a home, if the mortgage granted is 145,715 euros, the real price of the property would be around 175,000 euros. Of those, about 30,000 should be provided as 'entry'.

4. Other associated expenses. To that 20% of the down payment, you must add approximately another 12% of the purchase or appraisal value of the home and notary fees, which are borne by the buyer.

5. Savings. Thus, whoever wants to apply for a mortgage must have saved at least 45,000 euros. How long will it take to save that money if you charge 24,395 euros gross per year, that is, 1,600 euros per month in twelve payments?

6. The rule. If you comply with the recommendation to allocate 50% of salary to fixed expenses, 30% to other expenses or leisure and 20% to savings, the future owner will be able to save 320 euros per month. So, when 140 months (11 and a half years) have passed, you could save the necessary 45,000 euros.

7. The fee. Bearing in mind that it is not recommended to invest more than 30% of your salary in housing, the mortgage fee should be around 500 euros.

8. The term. This person could request a payment term of between 25 and 30 years, also depending on the interest.

 

At Hogar Mediterráneo we know all the necessary aspects to plan the purchase of a home.
Contact us if you are interested in requesting a mortgage to buy the house of your dreams and consult our related news: When to subrogate the mortgage? o Is it better to buy or rent a home?


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