How much do I have to save to buy a house?

Category: General

How much money do I need to have saved to buy a house?

When we think about taking the step of purchasing a house, the first thing we ask ourselves is: how much money do I need to have saved to buy a house? As a real estate agency in La Cañada, Paterna (Valencia), we work daily with clients of all profiles and countries, and the real answer is that in Spain it is recommended to have at least 30% of the price of the home in savings. This covers two fundamental components: the down payment of 20% and the associated expenses (taxes, notary, registry, management, appraisal) which are usually between 10% and 12% in second-hand homes, and up to 15% in new homes

For example, if you have your eye on a €200,000 home, the ideal would be to have a minimum of €60,000 saved before starting the process. In cities like Madrid or Barcelona, the recommended figures can be raised: Idealista indicated that an average family needs around €117,000 in Madrid and €95,000 in Barcelona.

Entry fee, taxes and expenses: the true initial cost

Buying a house is not just handing over the money for the agreed price. In addition to the input, which is usually 20%, various added costs must be taken into account:

• Taxes: in new housing, VAT is 10%; In used housing, the ITP can vary between 6% and 10% depending on the autonomous community. There is also the IAJD and the AJD in mortgages.
• Notary and registry: they usually represent between 0.3% and 0.8% of the value of the property.
• Appraisal and management: each one can involve between €300 and €600, depending on the case.

The sum of all these concepts means that the amount to be saved is around 30%-35% of the price of the home. In a €250,000 home, this translates into a saving of around €87,500.

How to calculate your purchasing and financing capacity

At laHome Inmobiliaria, we help our clients calculate their real purchasing capacity. This includes:

1. Determine your debt capacity: banks usually require that the mortgage payment does not exceed 35% of your net monthly income.
2. Simulate mortgage: we can make a realistic approximation of the savings needed based on your income and current interest rates.
3. Analyze your financial profile: job stability, previous debts and monthly savings capacity.

Our personalized approach—in five languages and with presence in multiple countries—allows us to offer solutions tailored to each profile from an honest and direct approach.

What percentage do banks finance today?

The general rule in Spain is that banks finance up to 80% of the price of the home or the appraisal value (whichever is the lower of the two). This leaves 20% that the buyer must contribute.

However, there are exceptions: some entities offer 90% or even 100% mortgages, especially for specific groups such as young people. But these often require additional conditions, such as linked insurance or good financial health.

Recommended savings according to the type of home

Depending on the type of property, recommendations vary:

• New home: as it is subject to VAT (10%) and IAJD, the expenses are close to 15%, in addition to the 20% entry. Total: 35%.
• Second-hand housing: the ITP can amount to 6%-10%, and other expenses add up to 10%-12%. Total: 30%-32% .
• Protected housing (VPO): some occasions have a tax reduction in taxes, so expenses may be lower.

Tricks and tips to save faster

1. Financial Planning: Define a monthly savings plan specific to your goal. Example: saving €1,000/month means raising €60,000 in 5 years.
2. Tax credits: take advantage of ITP or VAT reductions depending on your age, previous rental or type of home.
3. Rent with option to buy or off-plan purchase: allows part of that rent to be allocated to the future entry.
4. Request loans or aid from family members: in Spain, the income is often complemented with family contributions.

What mistakes to avoid when preparing the purchase of your home

• Do not calculate all expenses apart from the entry. Underestimating them can generate financial stress.
• Charging the monthly fee too much: exceeding 35% of income can put your stability at risk.
• Ignore the need for an emergency fund: after purchasing, it is always a good idea to keep a cushion for unforeseen events.
• Depend on financing greater than 80%, which can be a risky overexposure.

Is it better to buy now or wait?

At laHome Inmobiliaria, we advise you on the optimal time to buy. Currently, interest rates are at average levels, but any increase can make the mortgage more expensive. In addition, prices vary depending on the area of the Valencian Community and other regions. It is key to analyze:

• Price evolution locally.
• Mortgage rate trends.
• Your financial situation (accumulated savings, job stability).

The experience from a front-line real estate agency

As a team at laHome Inmobiliaria, we had a comprehensive system to accompany you throughout the entire purchase process. And so it was:
“For each exclusive sale we make a donation to the Spanish Association against Cancer.” Integrating social values into such a personal project reinforces our closeness to clients.

We have been a family since 2014 with roots in the Piscilimp Group and headquarters in La Cañada (Valencia). We speak five languages to offer a direct and honest relationshipwithout language barriers. Our commitment to residential areas and promoters of healthy living allows us to offer you properties close to nature, ideal to make your home.

Thanks to our online marketing strategy, we reach clients in Canada, the US, Europe and Asia, helping them plan their savings with real local examples. Thus, we facilitate not only the purchase of a house, but also the making of informed decisions.

Remember this rule if you wonder how much you have to save to buy a house

If you're wondering how much you have to save to buy a house, remember this rule of thumb:

• 20% entrance fee + 10–15% associated expenses = minimum 30–35% of the total price.

And all this without leaving aside your debt capacity (maximum 35% of your income) and a contingency fund.

At laHome Inmobiliaria we are more than an agency: we are your family, your professional support and your ally in this vital project. We put our experience, values and comprehensive system at your disposal so that you can dedicate your time to planning your dream, without surprises.

Contact us, we will be happy to help you.