Mortgage and down payment: plan the whole budget

The BNB caps (LTV up to 85%, DSTI up to 50%, term up to 30 years) are upper limits within which banks must operate — they are not a guarantee that any given bank will approve exactly as much as the cap allows. Each bank makes its own assessment of risk, income and credit history, and some terms may be more conservative than the regulatory ceiling.

Beyond the caps themselves, it is worth bearing in mind that terms can also vary by income type (employment contract, freelance, income earned abroad) and by property type — newly built, under construction, or on the secondary market.

A bank's appraisal of the property acts as a constraint on the collateral: the bank applies its financing percentage (LTV) to whichever is lower — the agreed price or its own appraisal — rather than automatically to the price. A specific bank may also cap financing relative to the agreed price itself, regardless of the appraisal — the exact terms need to be confirmed with the bank for your case.

• Own contribution for the purchase itself — the gap between the agreed purchase price and the approved loan amount.
• Transaction costs — notary fees, registration fees, local tax and loan-related fees, which vary and should be confirmed for the specific deal.
• Possible fit-out or finishing works, if the property is not move-in ready.
• A financial reserve for unforeseen costs — technical repairs, delays in selling a current home, and similar.

Plan each of these items separately, rather than assuming the ‘down payment’ covers everything beyond the loan itself — transaction costs are the part most often underestimated.

Before choosing a specific offer, it is useful to clarify several points with a lending adviser rather than relying only on the advertised interest rate.

• What is the difference between the nominal interest rate and the annual percentage rate of charge (APR), and exactly which fees and mandatory products are included in the APR — this needs to be confirmed specifically with the bank.
• How the property appraisal is determined and who carries it out — an independent valuer or one appointed by the bank.
• Under what circumstances the bank allows an exception to its standard caps.
• What income documentation is accepted if part of the income comes from abroad or from freelance work.

As a hypothetical example, suppose a buyer agrees a purchase price of EUR 140,000, while the bank's appraisal of the property comes in lower, at EUR 135,000. At the maximum permitted loan-to-value of 85%, applied to the lower appraisal, the maximum loan is EUR 114,750 (85% of EUR 135,000). The own contribution for the purchase itself is the gap between the agreed price and the approved loan: 140,000 − 114,750 = EUR 25,250 — separate from transaction costs and any fit-out.

If the bank appraisal matched the agreed price instead, the maximum loan at the same LTV percentage would be higher and the required own contribution lower. It is therefore important to plan with a realistic expectation for the appraisal, not just the agreed price, and to count transaction costs and any fit-out separately from the own contribution for the purchase itself.

Beyond the down payment itself, it matters that the monthly loan instalment, combined with other ongoing commitments, stays within reasonable bounds relative to household income — that is the logic behind the 50% DSTI cap. Before you start viewing specific properties, it is worth getting an indicative view from a bank on a realistic instalment for your income.

Work out the full budget across the categories above before you start viewings, and seek pre-approval from a bank so you know your real limits. For structuring a deal and coordinating with a bank, our team can help.