Borrowing capacity

Borrowing capacity is the maximum amount a bank will lend for a mortgage. In Belgium, it is determined by several criteria: debt ratio (repayment charges should not exceed 1/3 of net income), stable household income, remaining living budget after repayment, desired loan-to-value, and existing assets. Belgian banks apply NBB recommendations: maximum DSTI (debt service to income) ratio of 50%, with most files below 40%. Potential rental income is counted at 70 to 80%. Borrowing capacity is also influenced by the chosen term: the longer the term, the higher the borrowable amount, but the higher the total credit cost.