What house can I afford: how we calculate it
First, the maximum payment: your net income times the affordability percentage, minus what you already pay on other debts. From that payment, the interest rate and the term we get the maximum loan (the mortgage formula, in reverse).
Then, two possible prices. From your salary: the maximum loan divided by the share the bank lends. From your savings: what you have divided by what you put in for each euro of price (the unfinanced part plus costs). With 80% financing and 8% costs, each euro of price needs 28 cents of savings.
Your maximum price is the lower of the two. One of them almost always sets the limit: if the deposit holds you back, saving more raises your ceiling; if the payment holds you back, saving more changes nothing and what counts is salary, term or interest rate.
What the bank looks at in the Canary Islands
The same as in the rest of Spain, with one difference in costs: here there is no VAT but IGIC, and the transfer tax (ITP) on resale homes is 6.5% as a general rule. That is why buying costs in the Canary Islands tend to come in slightly below regions where ITP is 8 to 10%. For the exact breakdown, use the buying costs calculator.
If you are young and use a public guarantee scheme, some banks lend more than 80%. Raise the field “What the bank lends” to see the effect, but remember that you still pay the buying costs yourself.
Next step
With your maximum price in hand, see what is on offer in that range and where. Each area page shows the average price per square metre, hours of sunshine and wind, so your money goes where you actually want to live. And before deciding, check whether you are better off buying or carrying on renting.
Frequently asked questions
How much do I need to earn for a €150,000 mortgage?
Over 30 years at 2.7% interest, €150,000 works out at about €608 a month. With the usual limit of 35% of income, you need a net household income of around €1,740 a month, with no other debts.
How much do I need to save to buy a house?
With 80% financing, 20% of the price plus the buying costs. In the Canary Islands, for a resale home, that comes to about 28% of the price: around €55,000 to €56,000 for a €200,000 property.
Do both salaries count?
Yes, if you both sign the mortgage. Enter the combined net household income as income, and everything you both pay on other loans as debts.
Is the result reliable?
It is the calculation banks use as a first filter. After that, each lender looks at your job stability, the valuation and its own risk policy, so the real limit may be slightly higher or lower.