The loan cap in brief:
- The maximum home loan amount you can take out is 85% of the fair value of the collateral provided for the loan.
- The loan cap for first-time home buyers is 95% at maximum. For ASP loans, the maximum amount remains at 90%.
When buying a home, the fair value of the collateral refers to the purchase price of the home.
An example of the loan cap and collateral:
- The purchase price of the home is 100,000 euros.
- The maximum home loan amount you can take out is 85,000 euros (loan cap).
- The collateral value of the home to your bank is 75,000 euros at maximum.
- You will need to have savings totalling 10,000 euros or provide other additional collateral for the proportion that exceeds the collateral value of the home. OwnGuarantee can be used as the additional collateral.
- If you take out a loan exceeding 85,000 euros, you will also need to have savings or provide other collateral to cover the proportion exceeding the loan cap.
As a home buyer, you must have at least 15% (or 5% if you are a first-time home buyer) of the purchase price in savings or a corresponding amount of other collateral. For an ASP loan, the required self-financing share is still at least 10%. You can’t buy a home wholly with debt by using your future home as the only collateral and you can’t fill the gap between the loan cap and the collateral value of your home with a personal guarantee.
The loan cap is only applicable to the acquisitions of shares in a housing company or residential property and to loans intended for basic renovation. In addition to loans granted for the purchase of a permanent residence, the loan cap is applicable to loans granted for the purchase of a holiday home or an investment property.
When applying for a home loan, you must have sufficient loan servicing capacity for your total loan amount, which is considered to cover both your existing and any planned loans. Alternatively to covering the 15% self-financing share with your savings, you can cover it with collateral if you have additional collateral available to you and your loan servicing capacity is sufficient.
What is a deposit?
When you are buying a home, a deposit is the amount of money you pay upfront to the seller to ensure that the sale will go through later. If you end up cancelling the sale, you will usually not get the deposit back.
Using a deposit to buy a home
When the seller has received your deposit, they are required by law not to accept any new offers on the home. If the seller doesn’t accept your offer, you will get the deposit back. The deposit amount is agreed on when you make the offer. If the sale goes through as agreed, your deposit will be considered as a down payment and count towards the final transaction price. You can also make an offer on a home without a deposit. In this case, you will usually need to agree on a standard compensation instead.