In Belgium

The debt ratio (taux d’endettement) is a key metric used by Belgian banks to assess a borrower’s capacity to take on a property loan. It measures the proportion of monthly income consumed by debt repayments.

Formula: Debt ratio = (Total monthly loan repayments / Total monthly net income) x 100

The Belgian banking sector generally applies a maximum of 33%, meaning monthly loan repayments should not exceed one-third of net household income. This threshold is set by NBB (National Bank of Belgium) guidelines, though banks have some flexibility.

How it works

Salary income. Counted at 100% of net monthly income.

Rental income. Banks discount rental income to account for vacancy and maintenance risk. Typically, only 70-80% of rental income is counted.

Existing debts. All existing loan repayments (car, personal, other mortgages) are included in the calculation.

Example. Household net income: 4,500 EUR/month + rental income 800 EUR (counted at 80% = 640 EUR) = 5,140 EUR. Maximum monthly repayments: 5,140 x 33% = 1,696 EUR.

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Good to know
The NBB allows banks to exceed the 33% ratio for up to 10% of new mortgage production. This means some borrowers with strong profiles (stable employment, significant savings, valuable existing assets) may obtain financing above the standard threshold.

Practical example

Laurent earns 3,800 EUR net and owns one rental property generating 700 EUR/month. He wants to buy a second investment property. His bank counts rental income at 75%: 700 x 0.75 = 525 EUR. Total income: 4,325 EUR. Existing mortgage repayment: 750 EUR. Maximum new repayment: (4,325 x 33%) - 750 = 677 EUR, limiting his second loan to approximately 130,000 EUR over 25 years.

Key considerations

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Warning
The debt ratio is calculated on current income. If rental income drops (vacancy, arrears) or employment income changes, the actual ratio worsens. Always maintain a safety margin below the 33% threshold.