Calculating target house price from deposit amount + salary

[WillSnow]

Hey @Baptiste Wicht - here's a question about your article on buying a house in Switzerland, and calculating what your price range / target is.

So your super handy formula works for the normal 20% deposit:

(Net Income / 3) * (1 / 0.062) * (1/0.8)

However - what if we have a certain deposit amount that's more than the 20% figure we get with the above formula?

And yet, we still want to use our income + costs estimate as the basis for our monthly mortgage repayments.

So with a larger deposit, but our same income + expenses, is it possible to calculate our price range / target?

Does that make sense?

 

[Baptiste Wicht]

Hi

Yes, the question makes sense

The 0.8 in the formula is the amount to be covered by the mortgage. It's 1 - 0.2, and the 0.2 represents the 20% downpayments. So you can vary that.

For instance with a net income of 100'000 CHF:
* 20%: (100000/3)*(1/0.062)*(1/0.8) = 672K
* 30%: (100000/3)*(1/0.062)*(1/0.7) = 768K
* 40%: (100000/3)*(1/0.062)*(1/0.6) = 896K

So, the more you put down, the more you can theoretically afford based on your income.

--Baptiste

 

[WillSnow]

Excellent, thank-you. So it's quite simple in the end. I was really struggling to think of the maths

And then it's just up to each bank to see how they judge your bonus and such for what your net income is.

Thanks again!

 

[Baptiste Wicht]

And then it's just up to each bank to see how they judge your bonus and such for what your net income is.

Exactly, that can complicate things

 

[Carnica]

Hi,

At the time we were looking for a house I've made an excel table to calculate all the different costs.
Maybe it's helpful for you as well.

Regards