How Much Mortgage Can I Afford? 7 Questions Before You Go to the Bank
Before you go to the bank, you should know: How much mortgage can you actually get? Which term fits your life plan? And what does that mean for your monthly payment? These 7 questions help you prepare for the consultation.
Ahmet Parlak
Mortgage & Property Finance Expert, Vienna
TL;DR – In 60 Seconds
- Your mortgage depends on income, down payment, and desired term
- Banks check 3 criteria: credit score, equity ratio (min. 20%), debt service ratio
- Fixed rates give security, variable rates are more flexible
- Don't forget additional costs: property transfer tax, notary, broker
- Use our tools to calculate which mortgage fits you
Last updated: 2026-03-15 • This information provides general guidelines. Actual conditions depend on your individual credit and chosen bank. For binding offers, please contact banks directly.
TL;DR – In 60 Seconds
- Your mortgage depends on income, down payment, and desired term
- Banks check 3 criteria: credit score, equity ratio (min. 20%), debt service ratio
- Fixed rates give security, variable rates are more flexible
- Don't forget additional costs: property transfer tax, notary, broker
- Use our tools to calculate which mortgage fits you
How much equity do I have?
Banks in Austria require at least 20% equity – 30% is better. For a €300,000 property, you need €60,000–90,000. Why? Equity reduces risk for the bank and lowers your interest rate.
Example: Example: €300,000 purchase price with 20% equity = €60,000 → Loan needed: €240,000
What is my monthly net income?
Rule of thumb: Your loan payment should not exceed 35–40% of your net income. With €3,000 net, that's max. €1,050–1,200/month. Important: Banks calculate conservatively – they only consider secure income (salary, no bonuses).
Example: Example: €3,000 net × 40% = €1,200 max. payment → At 3.5% & 30 years = approx. €270,000 loan
How long do I want to pay off the loan?
Typical terms: 20, 25, or 30 years. Longer term = lower monthly payment, but higher total interest. Shorter term = higher payment, but debt-free faster.
Example: €200,000 loan at 3.5%: 30 years = €898/month (€123,000 interest) vs. 20 years = €1,160/month (€78,000 interest)
Fixed or variable? Which interest rate suits me?
Fixed rates: Predictable payment, but higher initial rate. Good for long-term security. Variable: Lower entry, but risk with rising rates. Hybrid: Partly fixed, partly variable.
Tip: Tip: If you want to stay 10+ years in the property → fixed rate. If you want to stay flexible → variable or short commitment.
What additional costs will I face?
When buying property in Austria, you additionally pay: Property transfer tax (3.5%), registration fee (1.1%), notary (approx. 1–2%), broker (3–4% if applicable). For a €300,000 purchase price, quickly €20,000–30,000 additional costs!
Warning: Warning: These additional costs often must be paid from equity!
What happens if interest rates rise?
Stress scenario: Suppose interest rates rise by 1%. Can you still afford the higher payment? Banks calculate this in credit checks. You should too.
Example: €200,000 loan: 3.5% = €898/month | 4.5% = €1,013/month (+€115) | 5.5% = €1,136/month (+€238)
How long will I stay in the property?
If you only stay 5–7 years, buying usually doesn't pay off (additional costs!). From 10 years it becomes interesting. Use our Rent vs Buy comparison to calculate.
Tip: Rule of thumb: Under 7 years → rather rent. From 10 years → purchase can pay off.
Mini Example: Lisa, 32, Software Developer
Calculation:
- →Equity ratio: €80,000 / €300,000 = 27% ✓ (above 20%)
- →Loan needed: €220,000
- →Max. payment: €3,500 × 40% = €1,400
- →At 3.5% interest & 25 years: Payment = €1,101/month ✓
- →Additional costs: approx. €24,000 (from equity)
- →Remaining: €56,000 buffer ✓
- →Result: Lisa can afford the purchase!
Frequently Asked Questions
In Austria, full financing (100%) is very rare and only possible with excellent credit. Most banks require at least 20% equity. Without equity, interest rates increase significantly.
Rule of thumb: Your annual net income × 4 to 5. With €40,000 annual income, that's €160,000–200,000 loan. But: The bank also checks your monthly burden (max. 35–40% of net income).
The debt service ratio shows what % of your income goes to loan payments. Banks want max. 40%. Formula: (Loan payment / Net income) × 100. With €1,000 payment and €3,000 income = 33%.
Depends on your risk appetite. Fixed rate = security, but higher rate. Variable = cheaper start, but interest risk. When rates are low → rather fixed. When high → maybe variable with short commitment.
With variable loans usually no problem. With fixed-rate loans, early repayment is often only possible against prepayment penalty (0.5–1% of remaining amount). Some banks allow free early repayments up to 10% p.a.
Talk to the bank immediately! Possible solutions: Payment pause, term extension, debt restructuring. In the worst case, foreclosure threatens. Therefore important: Plan buffer and calculate stress scenarios.
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Next step: quick scenario check
Pick the option that helps you decide fastest.