Home loans · Practical guide

Mortgage affordability after the introductory rate

Do not stop at the advertised initial payment. Request the repayment schedule and post-promotion terms, then test what happens to the household budget when an input becomes less favourable.

The date the documents were read, not a site visit.

Read the promotion with the repayment method

For each proposal, record its date, intended loan amount, term and principal-repayment method. Ask what the advertised payment includes, which event starts the promotional period and where the later schedule is shown. An advertisement is not your personal repayment schedule.

Separate an introductory interest period from any proposed principal deferral or reduction. A low starting payment can reflect different conditions. Ask the bank to explain the particular schedule and balance rather than comparing only the prominent percentage.

Request the post-promotion formula

The Law on Credit Institutions published by the Government Portal addresses agreed credit rates and fees. The planning inputs here must therefore come from the bank's particular proposal, not a universal rate invented by HAVO.

Record any reference-rate name, margin, reset dates, stated rounding or limits and notice source. If the explanation is simply market rates, ask how that is defined in the documents. Leave missing terms unresolved rather than substituting another bank's conditions.

Run three household-selected scenarios

Create columns for the current proposal / a higher post-promotion rate you assume / a reduction in income you assume. Hold the balance and comparison period constant when isolating a rate change. Request matching bank schedules or verify your calculator's method.

For each column use take-home income / essentials / all debt payments / housing costs not already counted / remaining money. Subtract the expense lines from income without counting the mortgage twice. These assumptions are stress tests, not forecasts of rates or earnings.

Price a change of plan

Request the proposal's charges for prepayment, closing the loan, changing terms and other proposed costs. Ask when they apply, how they are calculated and which items are required or optional in that proposal. Do not assume insurance or bundled services are identical across lenders.

If you might sell or repay extra principal, give the bank a hypothetical date and request a dated estimate. Compare the plan's full cash flows, not merely the first month. Unquoted items belong on the unresolved list before the budget is considered complete.

Set a decision checkpoint

Before committing, answer three questions: what remains after expenses, which costs could realistically change, and what reserve has the household agreed to use during an income shortfall? This guide imposes no single safe ratio on every household.

If the plan balances only with permanent promotional terms or omitted recurring costs, revise the assumptions, borrowing size or purchase timing for another enquiry. Bank approval and household comfort are different questions. Use verified bank channels for financial documents; do not upload them to HAVO.

Words worth knowing

Reference rate and margin
Components that may appear in post-promotion pricing; use the particular proposal's definitions.
Budget stress test
Recalculation under changed assumptions to see remaining cash, not a forecast.

Take this to a viewing

  1. Request a dated proposal and fee schedule.
  2. Fill three scenarios with explicit inputs.
  3. Identify unresolved costs before deciding.

Common questions

Can an advertised rate model the whole loan term?

Not by itself. Request the later terms and schedule for the proposal being considered.

Can HAVO confirm how much I can borrow?

No. The bank assesses approval; household budgeting and risk choices need your own consideration or appropriate advice.

Sources

Suggest a correctionWork out costs with your own numbers
All guides
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