How much can you really afford to buy?
The calculation your bank will make, before your first viewing: 5% imputed rate, the one-third rule, hard equity, amortisation of the second-rank mortgage and Vaud purchase costs. Two minutes, no sign-up.
Tap a rate to rerun the calculation with that term. The bank tests your budget as if the mortgage cost 5%. You pay the actual rate of the day. The calculation below shows both: the bank’s test and what you will actually pay.
Three rules that decide your purchase
Why 5%?
You may pay 1.8%. The bank, however, checks that you could cope if rates went back up: it calculates your interest at 5%, adds amortisation and 1% maintenance, and wants the total to stay below one third of your gross income.
First and second rank
Up to two thirds of the property’s value, the debt is well secured: this is the first rank. Between two thirds and 80%, it is the second rank, which carries more risk: it must be repaid within 15 years, or before retirement if that comes sooner.
If the bank values it lower
The bank lends on the lower of the two values: the price or its own valuation. A property at 1 million valued at 900’000: it lends 720’000 at most, and you need 80’000 more. Enter its value above to see the effect.
About 4.3% of the price, on top of the price
Paid by the buyer on the day of the deed, at the notary’s office. The table follows your calculation: on a price of CHF 1’000’000.
| Item | Rate | Amount |
|---|---|---|
| Cantonal transfer taxThe State of Vaud’s tax on the transfer of ownership | 2.2% | – |
| Municipal transfer taxThe municipality’s share: up to half the cantonal rate, depending on the municipality | 1.1% | – |
| Notary and land registerFees, registration charges, mortgage certificate; more if the mortgage is large | ~1% | – |
| Total | 4.3% | – |
Paid from equity
The bank does not finance these costs: they are paid from your own funds, in addition to 20% of the price.
The real requirement
On 1 million: 200’000 of equity plus 43’000 of costs, i.e. about 243’000.
Depending on the municipality
The municipal tax ranges from 0 to 1.1%: costs range from about 3.2% to 4.3%. Set your municipality under “Calculation settings”; the notary gives the exact figure.
Your calculation by email, and a call if you wish
I will send you the details exactly as you see them here. If you ask, I will call you about the next steps:
- what the bank will ask for, and in what order;
- how to strengthen your file before the first viewing;
- the properties that match, before they go online.
Alexandre · Affinités Immobilier, Pully