Mortgage: the costs you do not see in the monthly payment
The payment is not the whole cost of a home. Add the deposit, one-off purchase costs, insurance, upkeep, furnishing and a repair reserve. A commonly used rule of thumb is that total loan payments should not exceed 30-40% of net income. Run a stress test too: what if the interest rate rises?
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Why does the payment not tell the whole story?
The monthly payment is the number in the offer, but a home has other costs: some appear once at the start, others repeat every year.
Anyone who calculates only the payment risks buying a home they can pay for but cannot maintain.
Which costs come with the purchase?
- The deposit: the part you pay from your own money.
- One-off costs: valuation, notary services, registration, possibly loan arrangement fees.
- Insurance required by the bank: for the property and sometimes for life.
- Moving, furnishing, appliances, small initial repairs.
Ask the bank for all fees in writing and request the total cost of the loan, not only the payment.
Which costs repeat every year?
- Utilities and upkeep, including the building’s repair-fund contribution, if there is one.
- Yearly insurance.
- Local property taxes.
- Repairs and replacing equipment, which arrive irregularly but surely.
A cautious estimate: set aside a monthly amount for repairs even if you do not use it every month.
What does an example look like?
The figures are illustrative and not a bank offer.
| Item | Calculation | Amount |
|---|---|---|
| Deposit | 20% of 1,000,000 lei | 200,000 lei |
| One-off costs | assumed 3% of the price | 30,000 lei |
| Furnishing and moving | estimate | 40,000 lei |
| Needed on moving day | 270,000 lei | |
| Loan | 1,000,000 minus 200,000 | 800,000 lei |
The problem here is not the payment but that you need almost 270,000 lei available before the first instalment.
How much of your income should go to payments?
A general rule, not a law, says total loan payments should not exceed 30-40% of the family’s net income. For a net income of 20,000 lei a month, that is 6,000-8,000 lei.
A budget with payments at the top of the range leaves little room for a bad month. If you can, stay below the limit.
How do you test whether you can afford the loan?
Run a stress test: what happens if the interest rate rises by one percentage point? On an 800,000 lei loan that is roughly 670 lei more per month in the first year. With a variable rate, that scenario is realistic.
Also test a month without one member’s income. If the budget cannot cope, increase the deposit or choose a cheaper home.
In Family Calculator you can track a “Home loan” category next to utilities and see how much of the budget goes on housing this month.
Frequently asked questions
How big a deposit is right?
The bigger it is, the smaller the payment and the total interest. But do not drain your savings: keep a separate emergency fund.
What should I ask the bank before signing?
The total cost of the loan, every fee, the type of rate (fixed or variable), the terms for early repayment and any mandatory insurance.
Is it worth repaying early?
It can pay off, but check for penalties and whether you would miss the money in an emergency.