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Bond Affordability CalculatorThis calculator gives an indication of the maximum bond amount which applicants may qualify for based on their monthly combined net disposable income. It is also sometimes referred to as a bond affordability calculator. Before the implementation of the National Credit Act, the banks would use an average affordability factor which was applied to the applicants' gross monthly combined income to determine whether the applicants would be able to service the required monthly bond repayments. The affordability factor which was used came down to a 30% net disposable income figure and was calculated by applying this percentage to the total monthly gross remuneration. After the implementation of the NCA, banks are now required to base the affordability calculation on the actual monthly combined net disposable income of the applicants. The maximum bond amount calculation is therefore divided into two parts - first, users have to specify their monthly combined net disposable income. This amount is then applied to the annual bond interest rate and bond period in order to calculate the maximum bond qualification amount. We have also included a buffer interest rate % - it is never a good idea to work out affordability based on current prime lending rates. The buffer % is added to the interest rate and a buffer bond amount qualification is calculated. This will also give you an indication of the difference in the amount which can be borrowed after taking the buffer interest rate into account. Please note that there are a number of other factors which can potentially influence a bond application. The bond amounts calculated only represent estimates and can therefore not be guaranteed. |
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