How Much Can I Borrow for a Mortgage? Read the Stress Test

The most you can borrow for a mortgage is the loan whose monthly payment stays at or below roughly 35% of your net income — stress-tested at a rate about two points higher than the one you'll actually pay. That stress test, not the asking price and not the online calculator, is what decides how much you can borrow for a mortgage. In France and Spain the 35% line is effectively enforced; the Netherlands caps borrowing with a government income table; Portugal is tightening its limit from 50% to 45% in 2026.

The short version:

• Lenders size your loan from a monthly payment, not a house price — and cap that payment at roughly 30–35% of net income in most of Europe.
• They test you at a higher rate than you'll pay (often +2 percentage points), which is why the bank approves less than the calculator promised.
• The cap is a legal rule in France (35%, insurance included) and a central-bank limit in Portugal (dropping from 50% to 45% in 2026) — not just a guideline.
• The Netherlands ignores rate entirely and reads your maximum off a national income table updated yearly.
• Your existing debts (car loan, credit card, student loan) come straight off the top before the house is even priced.

Your budget is a monthly payment, not a house price

Here's the mental flip that changes everything: a lender doesn't ask "can this person afford a €300,000 house?" It asks "what monthly payment can this person sustain, and what loan does that payment buy at today's rate?"

That reframe matters because two buyers with identical incomes can qualify for wildly different loans depending on their existing debts, the term they choose, and the rate environment. The house price is an output of the calculation, not the input.

So before you browse a single listing, work backwards: net income → maximum monthly payment → maximum loan → maximum house price (loan plus your deposit). Get those four numbers and you'll never waste a Saturday viewing something the bank was never going to fund.

What percentage of my income can go to a mortgage?

In most of Europe, your total debt payments — the new mortgage plus any existing loans — can't exceed 30–35% of your net monthly income. That single ratio, called the debt-service-to-income ratio (DSTI) or taux d'effort, is the master dial behind almost every "how much can I borrow" answer.

The exact ceiling, and whether it's a suggestion or the law, varies by country:

France is the strictest case to understand. Since January 2022 the 35% cap has been binding — and crucially it includes your borrower's insurance (assurance emprunteur), not just principal and interest. France's High Council for Financial Stability (the HCSF) lets banks breach the limit on only 20% of new lending each quarter, and confirmed in March 2026 that the rule stays put. So in France, "what percentage of my income can go to a mortgage" has a one-word answer: 35, full stop.

Why does the bank offer less than the online calculator?

Because the calculator prices your loan at today's rate, and the bank prices it at a rate two points higher. That single difference — the stress test — routinely knocks 15–20% off the loan you thought you qualified for.

The logic is sound even if it stings: your lender wants to know you can still pay if rates climb during a 25-year loan. So it runs your application at a "what if" rate. Spanish banks, for instance, now simulate your payment with rates 2 percentage points higher; if your DSTI blows past 40% under that scenario, they decline — even if you're comfortably under the limit at the real rate.

Work the numbers and the gap becomes concrete. Take a household with €4,000 net per month and no other debts, so a 35% ceiling of €1,400 a month, on a 25-year loan:

The calculator shows €280,000. The underwriter, testing at 5.5%, lends €228,000 — about €52,000 less. Same income, same payment, two very different houses. That €52,000 isn't a glitch; it's the buffer the regulator forces into the system. Knowing it exists before you make an offer is the difference between negotiating from strength and watching a deal collapse at the financing stage.

How many times my income can I borrow?

As a rough sanity check, most borrowers land around 4 to 4.5 times gross annual income — but that's a symptom of the payment math above, not a rule lenders apply directly (outside the UK). It rises when rates fall and shrinks when they climb.

The UK is the one big market that does use an income multiple as a hard control. The Bank of England's loan-to-income flow limit caps the share of a lender's new mortgages at or above 4.5× income to 15% of its book. In 2025 the rules were loosened — individual lenders can now exceed that share as long as the market stays within 15% in aggregate — and in April 2026 the Prudential Regulation Authority proposed removing the firm-level cap entirely. The direction of travel is looser, but 4.5× remains the number most UK buyers run into.

Continental lenders flip the logic. Rather than start from an income multiple, they start from the payment ceiling and let the multiple fall out of it — which is why a German buyer at 3% rates can borrow more "times income" than a Portuguese buyer facing a 45% DSTI cap, even on the same salary.

The country rules that actually decide your number

The headline ratio is only half the story. Each market layers on its own machinery:

• Netherlands — the most rigid system in Europe. Your maximum mortgage isn't negotiated; it's read off the financieringslastpercentages, a national income table from Nibud updated every year. For 2026, average wages are assumed to rise 4.1%, so a household earning €70,000 can borrow roughly €6,000 more than in 2025, and one earning €100,000 about €15,500 more. You can add a fixed top-up for an energy-efficient home — but those extras were trimmed for 2026 (an A+++ label now adds €20,000, down from €25,000).
• Portugal — the Banco de Portugal recommends a DSTI ceiling, currently 50%, with limited room for exceptions. After consulting banks in May 2026, the regulator is lowering that ceiling to 45%, expected to take effect by early summer. If you're borrowing in Portugal this year, that change directly shrinks your maximum.
• Germany — no statutory cap, but lenders rarely let total housing costs exceed ~35% of net income, and they count Hausgeld (building service charges) and a maintenance reserve in that figure, not just principal and interest.
• Spain — the Banco de España's ~35% guideline plus the +2-point stress test described above; strong profiles occasionally stretch to 40%.

The practical lesson: the same €60,000-household income produces a different maximum loan in every one of these countries, because the rule differs, not just the rate.

The number the calculator forgets: your existing debts

Before any of this, lenders subtract what you already owe. A €350 car-loan payment and a €150 minimum on a credit card don't just reduce your budget — they come straight off the 35% ceiling. On a €4,000 net income, that €500 of existing debt drops your available mortgage payment from €1,400 to €900, cutting your borrowing power by roughly a third.

This is also where buyers forget that the loan is not the bill. On top of the purchase price you'll owe transfer tax, notary, and mortgage fees — typically 8–15% more in cash that the bank won't lend you. We've broken those down market by market in the true cost of buying a house; read it alongside this one, because your borrowing limit and your cash-to-close are two separate walls you have to clear at the same time.

How people who get this right actually do it

The buyers who never get blindsided at the financing stage do one unglamorous thing: they pin down their real number first, then shop.

A repeatable way to do it:

1. Start from net income, not gross. Continental DSTI rules use take-home pay.
2. Subtract existing debt payments to find your true monthly headroom.
3. Apply your country's ceiling (35% in France, the Nibud table in the Netherlands, 45% soon in Portugal).
4. Stress-test it yourself — rerun the loan at +2 points and use that lower figure as your real maximum.
5. Add your deposit, subtract the buying costs, and only then set your house-price ceiling.

Whether to lock that payment in at a fixed rate or gamble on a variable one is its own decision — we walked through it in fixed or variable in 2026. And once you own the place, the same DSTI discipline tells you whether spare cash should overpay the mortgage or sit in savings.

The trouble is keeping all of it in one place. Income, existing debts, the deposit you've saved, the stress-tested payment, the 8–15% of costs stacked on top — it lives in scattered spreadsheets and half-remembered figures, and that's exactly when people overcommit. CasaTab was built to hold the whole picture of a house purchase in one shared view, so the number you fall in love with is one you can actually finance.

The takeaway

"How much can I borrow" feels like a question for the bank. It isn't. The bank is just applying a ratio, a stress test, and a country rule you can run yourself in ten minutes. Do that math before you view a single property and you'll negotiate from a real budget instead of a hopeful one — and you won't be the buyer whose dream house evaporates the week the mortgage offer comes back.