What is the Acceptable Debt-to-Income Ratio?
At Creditchoice Ltd., we work daily with people dreaming of their own home or better terms on their mortgage loan. One of the most frequent questions they ask us is: “What portion of my income should ideally go towards the monthly instalment?”
This is a completely natural question—a mortgage is a long-term commitment, and it is crucial to know that the option you choose is comfortable and sustainable for your family budget.
What Do Banks Consider?
Banks use a metric that compares your net income (your salary after deductions) with the future monthly instalment. Typically, the ratio they accept is 50% of the income. This means that if you receive 3,000 BGN net, the bank could approve an instalment of up to 1,500 BGN.
It is important to emphasise that this is not a strict and universal limit. Each bank has its own internal rules, which we at Creditchoice Ltd. inform you about and help you understand. For some clients, a higher instalment is not a problem, especially when incomes are stable and expenses are well-planned.
How to Judge What is Comfortable for You?
The maximum acceptable ratio does not always coincide with the “comfortable” one. For some clients, the comfort zone is around 30–35% of income; for others, it is 40–45%, and some smoothly service even higher instalments.
It all depends on:
- The size of your other expenses;
- The presence of other loans;
- The stability of the income;
- Your future plans (children, renovation, a new car, etc.).
How Creditchoice Ltd. Helps You Find the Balance
Our task is to guide you toward a solution that is simultaneously:
- Approvable by the bank,
- Comfortable for your budget,
- Sustainable in the long term,
- And the most advantageous according to market conditions.
We analyse all your parameters—incomes, expenses, terms, interest rates—and simulate various options. This way, you can realistically see what your budget would look like with a specific instalment and interest rate. Our approach is not to limit you, but to help you make a confident and informed choice.
What to Remember?
There is no universal “right” ratio. There is a balance that must correspond to your capabilities, goals, and lifestyle. While banks often follow the 50% rule, we at Creditchoice Ltd. strive to find a solution that will allow you to live peacefully, develop, and repay the loan without stress.
