Buying too much house
All too often, we see people left with very little breathing room in their finances following the biggest purchase of their lives.
In this article we are covering:
· How to decide how much house you can actually afford.
· The hidden costs of buying and owning a property.
· What to do when you’re already stuck with “too much” house.
How much house can you actually afford?
How would you answer this question? Where would you start?
If your mind immediately went to "I'd look up the maximum mortgage amount the bank will lend me," you are thinking along the exact same lines as most home buyers.
“How much can I borrow?” is the starting point for most people buying a new home.
And the holy grail for the bank and mortgage advisors.
But a mortgage lender’s calculation only answers one narrow question: What is the legal maximum debt you can service without defaulting?
It calculation doesn’t take into account that you want to travel home to visit family, raise children, or build long-term wealth.
So instead of asking "How much can I borrow?", a much better starting point is: "How much financial breathing room do I need and want?"
In our coaching practice we always look first for the Sweet Spot:
ALL of your total expenses (mortgage payments, VvE fees, utilities, maintenance, AND all other living costs like groceries, eating out, shopping and travel) stay comfortably within 65–80% of your net income.
Meaning, leaving at least 20% of cash freed up every month to save, invest, and build your future freedom.
The selling price for your home is NOT the whole story
There’s another dimension to "buying too much house" that catches buyers off guard: upfront transaction costs (in Dutch: kosten koper).
The price tag you see on the listing or the final amount you agreed with the seller for the property isn't the total amount required from you.
Even if you go for 100% mortgage financing to avoid a down payment (so you can invest that cash elsewhere), you still need 3% to 5% of the purchase price in cash on signing day.
Why? To cover transaction fees that, in the Netherlands, are paid by the buyer: 2% transfer tax, notary fees, mortgage advisor costs, valuation reports, and real estate agent fees.
To give you a real-world example: When Carlos and I bought our new home in Amsterdam (with zero downpayment, 100% financed with debt), we still had to pay an additional €26,000 in cash upfront just to cover the transaction fees.
Which is no small change.
If you drain your savings to pay these closing costs, you enter homeownership with zero emergency buffer.
Trying to rebuild your safety net while juggling higher monthly expenses can feel like an exhausting, high-stress treadmill.
What if I’m already stuck with “too much” house
If you're reading this, looking at your monthly expenses, and realizing you've already maxed out your budget on a property... please take a deep breath.
First: You did not fail. You simply followed the standard script provided by banks, agents and mortgage brokers whose job is to maximize loan volume, not protect your personal finances.
Second: Being house-rich and cash-poor is stressful, but it does not have to be permanent.
And you don't necessarily have to sell your home to get your life back.
There are almost always other levers to pull to recover your monthly breathing room, whether that's requesting a mortgage risk-tier reduction, setting up monthly tax return advances, or restructuring your cash flow through intentional planning ahead.
The next step
Regardless of where you are on the homeownership journey, come join the upcoming live webinar on October 13th where I will walk you through the frameworks we use with our financial coaching practice.
And if you’re ready to take action to progress on your specific money goals today:
Let's look at your numbers together, remove the stress, and map out a practical cash flow plan so you can actually enjoy your home.
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