How the calculator works out your purchase
On top of the purchase price come the purchase costs. Together, they make up the total cost. From that, you subtract your equity – the rest is the loan you need.
The loan and the interest rate give you the monthly payment. The calculator compares it with your income, your other fixed costs and your reserves and tells you whether the purchase is comfortable, tight or not yet within reach. If you enter your current rent, you also see the comparison.
If you don’t know your interest rate yet, the calculator uses an average market rate and shows it as an assumption. If you have an offer from your bank, enter your rate.
Example
Say a flat in North Rhine-Westphalia costs €420,000. The calculator puts the purchase costs at around €39,900, making €459,900 in total. With €80,000 in equity, you need a loan of €379,900.
At 3.5% interest and 2% initial repayment, that would be around €1,740 a month. Whether that fits comfortably depends on what is left after this payment for living, reserves and your other goals – which is exactly what the calculator checks.
All values are freely chosen examples. Interest rates, purchase costs and banks’ requirements change.
What share of your income?
An often-quoted rule of thumb puts the monthly payment at no more than 35 to 40% of net income. That is only a rough guide. What matters more is what is left after the payment: running costs of the home, reserves for repairs, car, children, holidays and retirement savings.
Think about later, too: when the fixed-rate period ends, the payment can go up. A higher repayment makes you debt-free sooner but raises the payment. Feel free to work through several variants.
Don’t forget the purchase costs
In Germany, the purchase price comes with real estate transfer tax (the rate varies by federal state), notary and land registry fees and, where applicable, an estate agent’s commission. Together, this is often around 10% of the purchase price, sometimes more. Austria and Switzerland have their own taxes and fees. That is why the calculator asks for the country and region.
Many banks expect you to pay at least the purchase costs from your equity. Your emergency fund is not part of that – it is meant to still be there after the purchase.
In Switzerland: affordability
Swiss banks usually check affordability using an imputed interest rate that can be well above the current rate, and add running costs and amortisation. In that calculation, housing costs may make up no more than around a third of gross income. On top of that, at least 20% equity is usually required.
The calculator does not replicate this bank calculation. It shows you what fits into your month with your own details.
Ongoing costs after the purchase
The monthly payment is not the end of it. As an owner, you pay property tax, insurance and running costs, and in a flat also service charges to the owners’ association. Then there are repairs and, at some point, larger renovations – roof, heating, windows.
Plan a monthly reserve for this from the start, even if nothing breaks in the first year. How much to set aside depends on the age and condition of the property.
More than a number
A home changes your month for many years. In Wealthbliss, you see what the monthly payment means for your other goals, which levers you have – more equity, a longer term, a different purchase price – and how buying, building or renovating affects your “truly free”.