• Enric Tarraso-Letang

What you can borrow or what you should borrow?

The amount you can borrow and the amount you should borrow are sometimes two very different things. Before you apply for a home loan, it makes sense to realistically assess your financial situation. Here’s how to do it.

Understand your borrowing capacity

Generally speaking, your borrowing capacity – what you can borrow – depends on a number of factors, including:

  • your income

  • your monthly expenses

  • your existing debts

  • how much deposit you have saved

  • current interest rate

  • type of loan

  • whether it’s a principal, or principal and interest loan

  • the term of the loan