On an annual basis the planned loan instalment looks feasible. In an ordinary month there nevertheless remains little, because part of the income comes as a bonus payment or additional expenses occur irregularly. That is not a contradiction in calculation. a figure related to the year and the actually available monthly budget answer different questions.
Correctly naming the current supervisory orientation
The FMA currently cites for prudent residential mortgage lending, among other things, a loan-to-value ratio of at most 90 percent, an annual credit burden of at most 40 percent of annual net income and a term of at most 35 years. It describes exceptions and the leeway of banks. The earlier KIM regulation applied until June 2025; the current recommendations should therefore not simply be described as an unchanged rigid KIM obligation. [AT-FMA]
This is not a loan commitment and not a personal budgeting recommendation for every household. A bank checks the concrete financing according to its applicable standards. Even a loan within a stated ratio can be inconvenient or too risky for your everyday life. Conversely, a single deviating value does not allow a blanket prediction of the bank’s decision.
Record annual net and ongoing cash flow separately
First list the actually expected net incomes and mark secure ongoing income, bonus payments and uncertain components. Assign the incoming payments to the months in which the money is available. Do not use the same bonus payment at the same time for holiday, annual insurance and additional loan reserve.
Example, solely for illustration: A household receives together €4.000 net in ordinary months and expects a total of €56.000 net in the year. An instalment of €1.500 equals €18.000 annually, i.e. around 32,1 percent of these annual earnings. In an ordinary month, however, it is 37,5 percent of the ongoing €4.000. Other loans and the exact bank-side calculation are not considered in this simplified example.
Both values can be arithmetically correct. The first describes a yearly comparison, the second the ordinary payment month. It would be wrong to use either as the sole proof that the financing fits. It is additionally important when which other expenses are to be paid.
Do not view expenses only by average
Our editorial recommendation: Keep, alongside the monthly baseline budget, a calendar of the larger annual payments. Complement mobility, care, insurance, living costs and the ongoing property costs with your own receipts. When buying an apartment, payments to the owners’ association and possible additional burdens are not settled by the personal loan instalment.
Also check the condition of the property. A low loan instalment can coincide with high short-term renovation needs. Costs that are required for the specific purchase or a necessary work will no longer be available later as a free reserve. Therefore separate purchase funds, planned works and an actually available contingency buffer.
Calculate a simple stress test
Do not immediately change all assumptions at once. First check individually what happens with less available income, higher ongoing costs or a later changed interest rate. For a variable-rate loan or after a fixed-rate period, different burden scenarios are relevant. Ask the bank for understandable amortisation schedules and the contractual adjustment mechanisms.
Another freely chosen test is: How does your monthly surplus change if unexpectedly €300 of additional expenses occur? This amount is not a general safety limit. It only serves to check your own calculation against a comprehensible change. A remaining balance of zero practically means that further surprises would have to be absorbed elsewhere.
Separate the bank’s decision from your decision
A financing approval does not automatically confirm that you can finance every life plan unchanged. Discuss foreseeable changes and ask questions about total costs, interest fixation, repayment and conditions. Non-binding example calculations should be clearly distinguished from a concrete offer.
In the end you need both: the professionally assessed financing and a household budget you understand yourself. The annual ratio is a point of orientation. A robust payment plan additionally shows whether the instalment also works in the months in which no bonus payment is received and nevertheless a larger bill is due. The article does not replace individual financing advice.