1. Decide how much you can pay every month

To calculate just how much you can afford to pay for a home each month, you should carefully and holistically look at your income. Property Finance Experts often recommend using your net income or the money you bring home after taxes and other deductions. This is critically important to get a realistic view of how much you can afford to pay on a loan.

1. 1. Add up your total monthly income.

Let’s say you bring home € 2,800 a month from your job and your spouse brings home € 2,500 a month. Your total monthly take-home pay would be € 5,300.

1.2. Multiply it by 0.25 (25%) to get your maximum loan (mortgage) payment.

If you both earn € 5,300 a month, that means your monthly house payment should be no more than € 1,325. The paradigm bellow indicates the figures for a fixed loan mortgage from Piraeus Bank.

INDICATIVE EXAMPLE

For a loan amount of € 100,000, maturity of 20 years, fixed interest rate of 5.30% for 2 years followed by floating interest rate based on Euribor 1M (-0.47% on 18/10/2019), plus a margin of 3.50% (plus levy 128/75, 0.12%), Inquiry Cost: 350 €, cost of legal checks: 50 €, cost of technical checks: 130 €:

Total Credit Amount: 100,000 €
Total Credit Cost: 64,610.24 €
Total Amount to be paid: 164,610.24 €
APR: 5.63%

The APR was calculated using the fixed rate for the entire loan duration since the floating rate is lower that the fixed.
The APR and the total amount to be paid are an example and apply only for the abovementioned data.

Loan term

From 6 to 30 years depending on the intended purpose of the mortgage loan:

• To buy, build or finish a home from 6 to 30 years
• To renovate or repair a home from 6 to 20 years
• To repay a loan from another bank up to 3 years + the number of years remaining from the original loan

Interest rate

The interest rate of the Fixed-Rate Mortgage Loan is:

Fixed for the first 2, 3 or 5 years

2. Calculate The Hidden Costs of Owning a Home in Chania

Property Taxes

As a homeowner, you’ll need to pay property taxes, an annual fee to the in which you reside. It’s not the bank that determines the property tax, it’s the country in which the home is located.

Moreover, you should also consider the Uniform Real Estate Property Tax (“ENFIA”). The principal tax on buildings is calculated by multiplying the square meters of the building by the principal tax ranging from 2-13€/sq. and other coefficients affecting the value of the property (e.g. location, use, flour of the property).

Determining these tax values per sq. m. is part of a complex process undertaken by experts appointed by the Hellenic Government and it is subject to periodic reviews and changes.

The Heating, Ventilation and Air Conditioning (HVAC) System

HVAC systems are important parts of any building infrastructure that provide thermal comfort for their occupants accompanied with indoor air quality. HVAC systems can be classified into central and local systems. Primary HVAC equipment includes heating equipment, ventilation equipment, and cooling or air-conditioning equipment.

Because of its complexity, your home’s HVAC system is not something you’ll be able to inspect, repair or replace yourself. Unless you’re an HVAC professional or electrical engineer, you should be prepared to hire a certified professional or a maintenance company in Crete.

Furnishings and Appliances

Your new home in Chania is likely to be purchased without furniture and appliances. While for some properties available in the real estate market of Chania, some appliances such as dishwashers and ovens are considered fixtures and are included in the sale price, portable appliances like washers, dryers and refrigerators are not always included. If you don’t get the property seller to throw them in, you may have to buy new ones.

Consider the age of the home you are buying. If it’s ten years old, your dishwasher, fridge, washer and dryer, heating central system and solar panel may all be on their last legs.

Can you really afford to buy a house in Chania, Crete?

There is a plethora of things to consider when deciding if you can really afford a house. For example, you’ll need a significant amount of money to invest for your down payment and closing costs. Most property buyers in the Prefecture of Chania put anywhere from 5 to 15 percent down, and at closing, you can expect to spend about 2 to 6 percent of the property sale price.

Moreover, consider monthly utility payments and ongoing property management costs. In addition to the standard costs, you’ll have homeowner’s insurance, property taxes and loan insurance. Repairs and maintenance costs will vary widely, but you can expect to spend around 0.5 -1.0 percent of the home sale price every year—and more if it’s a fixer-price from a property management company.

We break down these costs more for you in our Chania Property Buyers Expenses guide, here.

Even with all that info, it can be difficult to do a side-by-side comparison of home ownership costs with your current property costs in your home country.

Find the best real estate agent in Chania, Crete

Though your search for homes in Chania or Rethymnon may start online, it shouldn’t end there. You can do a lot of research on your own, but you need the help of a real estate professional when it comes to actually finding and securing your perfect home in Chania, Crete. Our dedicated real estate team can help you figure out how much house you can afford and what kind of homes you can expect to find, considering the price range, property availability and market trends. You can also search for off-market properties and discover great real estate deals in Chania and Rethymnon before anyone else.

The Bottom Line.

The mortgage payment is only a fraction of the associated costs you’ll face as a new homeowner in the island of Crete. Make sure you familiarize yourself with all possible related expenses, property taxes and budget carefully before taking that big leap or contact us for more information.