Would you like to acquire a property but you are having difficulties determining your budget? BuyerSide, your real-estate purchasing consultant, gives you a few tips to work out how much you need for your future acquisition.
Basic principle of the National Bank of Belgium (NBB)
Since 2020, the NBB has set limits for mortgage loan percentages. Owner occupiers can borrow a maximum of 90% of the purchase price excluding costs, investors 80%.
So you should make sure that you have capital amounting to at least 10 or 20% of the purchase price, as appropriate, as well as the full costs linked to the acquisition (registration duties, notary’s fees, costs, etc.).
Examples :
Building suitable for letting in Brussels
| Purchase price | 1.000.000 € | |
| Costs (registration duties, notary's fees, searches, mortgage, etc.) | 150.000 € | 15% |
| Total | 1.150.000 € | |
| Bank can finance up to 80% of the purchase price excluding costs | 800.000 € | 80% |
| Balance to be financed using own capital | 350.000 € | 30% |
House intended for owner occupation in Brussels
| Purchase price | 1.000.000 € | |
| Costs (registration duties, notary's fees, searches, mortgage, etc.) | 150.000 € | 15% |
| Total | 1.150.000 € | |
| Bank can finance up to 90% of the purchase price excluding costs | 900.000 € | 80% |
| Balance to be financed using own capital | 250.000 € | 30% |
NB: Depending on your profile, your bank could make an exception to the rule set by the NBB,
but they will have to be able to justify this decision, require additional guarantees, etc.
1. Determining your borrowing capacity
In addition to the NBB’s basic principle, you should also check your borrowing capacity. In other words, what sum will you be able to repay monthly over the period of the loan, bearing in mind the interest rate indicated. You may be able to borrow either the maximum authorised by the NBB, or less.
To calculate your borrowing capacity, list the following elements:
- Your income and that of your partner
- Your expenses: food, leisure, transport, loans, savings, etc.
The difference between your income and your expenses equals the amount you can repay every month for your mortgage. In practice, the banks assume that the amount of the reimbursement may not exceed one-third of your income.
2. Determining the various costs linked to the acquisition of real estate
Unfortunately, acquiring real estate is not confined to the purchase price alone. A number of costs linked to the amount of the acquisition also have to be added to your budget:
The amount of the registration duties
This is a percentage of the purchase price that varies depending on the Region in which the property is located. In the Walloon Region and the Brussels-Capital Region, it stands at 12.5%, while in the Flemish Region it is 12% (or 3% for the purchase of a single property used as the family home). In Brussels, you can benefit from a registration duties allowance on the first € 175,000 when buying a single property to be used as the family home, provided the price does not exceed € 500,000.
Notary's fees
These are also calculated on the basis of a percentage of the purchase price and are liable for 21% VAT.
Mortgage registration duty
If you take out a mortgage loan, the mortgage registration duty is payable to the authorities. This corresponds to 0.30% of the purchase price.
Deed costs
The deed costs correspond to the cost of the administrative searches carried out by the notary to draw up the official deed of sale. The amount may vary depending on the specific features of the sale. You should allow between € 600 and € 1,000 for this item.
3. Including the amount of any work
If you plan to carry out work in your future property, then you can include this amount in your mortgage loan or pay it using your own capital if you have the necessary funds available.
4. Calculating the amount of your monthly payments
You can use simulators or make an appointment directly at your bank to gain an idea of the amount to be repaid each month, depending on the interest rate, the length of the credit facility, etc.
5. Finding out about public aid and tax benefits linked to buying real estate
Depending on the region, you may be eligible for grants or financial assistance. In addition, a mortgage loan may entitle you to tax benefits under certain conditions.
6. Setting aside reserve funds
When you purchase real estate, you should plan a budget for unforeseen circumstances. This is why we advise you to keep a reserve equal to around six monthly payments of your loan.
BuyerSide, your consultant for the purchase of your future real estate in Brussels
A great many things have to be taken into account when buying real estate. BuyerSide, your real-estate consultant, helps you find the property that meets your search criteria and your budget thanks to a precise financial analysis and in-depth technical knowledge.
Would you like the assistance of a professional for the acquisition of your future real estate?