The use of the calculator makes it possible to simulate very quickly its borrowing capacity according to its annual net income and its monthly expenses . You must also indicate the chosen duration and the interest rate.
In general, the lender is based on a debt ratio of 33% to determine the borrowing capacity of a household. However, this analysis needs to be part of a broader study to screen all financial elements.
What revenues are taken into account?
All income of a certain nature enters into the calculation. The net professional wages first: recurring bonuses like the 13th month or the holiday bonus are thus accounted for. Variable bonuses will only be taken into account if they are paid regularly.
The incentive and participation bonuses are totally excluded from the calculations given their random nature. Even if they were paid in previous years, nothing says that you will continue to benefit in the future.
An exceptional bonus is not included in the borrower’s net income .
Allowances are sometimes subject to a more detailed analysis.
- Family allowances will not be taken into account if your children are close to the majority because these benefits will not be paid in a few years.
- The PLA will be weighted because of its uncertainty. Some banks do not integrate them at all.
Attention : to benefit from the APL, the financing must be based on a loan NOT: find out more
Regarding rental income, the bank calculates the rent net of charges and taxes. Some of them simply apply a percentage on gross rental income .
The borrowing capacity is calculated by simulating the level of its future expenses (after completion of the project). Do not consider the rent since you will not pay it once your project is completed. At this stage, you should only consider the monthly payments of your current loans: real estate loans, consumer loans, cash reserves. Some banks reinstate the amount of authorized overdrafts that are related to a loan.
The notion of rest to live
As you can see, the borrowing capacity calculator is based on a debt ratio of 33%. In some cases, the bank may allow this limit to be exceeded, especially when the remaining amount is sufficient.
Thus, for high incomes, it will be possible to borrow with a debt of 37 or even 38% . On the other hand, a household with two dependent children with modest incomes may be denied funding, even at a rate of less than 33%.