Mortgage affordability calculation in Slovakia: how banks view investors
What affects mortgage affordability: income, existing loans, DTI, DSTI, LTV, rental income and bank-specific rules.
Affordability is the ability to repay a loan safely. For a property investor, it is not only monthly income. Existing repayments, reserves, income type, portfolio debt and bank-specific rules all matter.
What affordability consists of
A bank reviews net income, employment or business stability, existing loans, credit card limits, household situation and expenses. For investors, proven and stable rental income can also matter.
Internal bank models differ, so the same investor may receive a different answer from different banks.
DTI, DSTI and LTV define the limits
DTI compares total debt with annual household income. DSTI checks whether repayments, after subsistence minimum and interest stress, stay within the permitted share of income. LTV compares the loan amount with collateral value.
These rules show that another purchase is not only about the down payment. Existing portfolio debt and repayment capacity matter.
How to prepare before applying
The best preparation is to keep the portfolio clean before negotiations start. A clear view of rents, repayments, loan balances and property values speeds up conversations with brokers and banks.
- check loan balances and fixation dates,
- prepare income and rental documents,
- allow for a higher repayment scenario,
- test lower rent or a vacant month.
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