Borrowing limits can feel abstract until you see them applied to a real income. Here's a worked example showing how the numbers actually play out.
The example
A single applicant earning €75,000 a year would typically qualify for a mortgage of around 4 times gross income — in this case, €300,000. That gross income works out to roughly €4,400 a month after tax.
At a 3.5% interest rate over 35 years, repayments on that €300,000 mortgage come to about €1,240 a month — around 28% of net income, which lenders would generally view as manageable.
Why stress testing matters
Lenders don't just look at today's rate — they check what would happen if rates rose. Stress-testing this example at 5.5% pushes the repayment up to roughly €1,611 a month, or about 36% of net income. That gap between the current-rate repayment and the stress-tested figure is exactly what a lender is checking you can absorb.
Living costs count too
Underwriters also factor in everyday living expenses — food, utilities, transport, and so on. A single person is typically assumed to need around €1,500 a month for this. In our example, that still leaves roughly €1,300 a month free after the mortgage and living costs — a reasonably comfortable margin.
The term you choose changes the picture
| Term | Monthly repayment |
|---|---|
| 35 years | €1,240 |
| 30 years | €1,347 |
| 25 years | €1,501 |
Shortening the term from 35 to 25 years costs an extra €260 a month — but shaves a full decade off the mortgage. Whether that trade-off makes sense depends on your income stability and how comfortable you are with the higher repayment; a lender will want to see clear evidence you can sustain it before approving a shorter term.
