Borrowing capacity

Borrowing capacity is the maximum amount a bank will lend for a mortgage. In Belgium, it is determined by several criteria: the share of net income going to repayments, stable household income, remaining living budget after repayment, desired loan-to-value, and existing assets. The National Bank also asks banks to keep loans combining an LTV above 90% and repayments above 50% of income (DSTI ratio) to 5% of their annual lending. 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.