How much can you afford? The three rules banks use
April 16, 2026"Can I afford it?" — that's the first question we ask when browsing apartment listings. And in most cases, the answer is "depends who you ask."
The bank will say "yes" — because it's profitable for them to give you a loan. The broker will say "yes" — because they need a deal. But your personal finances say something else. There are three international affordability rules that have been used for decades. None of them is Bulgarian regulation — they are guidelines created by financial institutions and consultants. But they are extremely useful for honestly assessing your situation.
Let's apply them with real numbers for Sofia.
The data we're working with
According to NSI (National Statistical Institute) data for Q4 2025, the average gross salary in Sofia is EUR 1,914/month (BGN 3,743). After deducting social security (13.78%) and tax (10%), the net salary is around EUR 1,485/month.
An important note: the median (i.e., the salary that splits workers into two equal halves) is probably 15–20% lower than the average — because of the IT and finance sectors, which pull the average up. If you don't work in those sectors, your realistic salary may be closer to EUR 1,200–1,300 net.
Average housing prices in Sofia for Q1 2026: EUR 2,100–2,250/m². A typical 2-bedroom (~65 m²) costs EUR 140,000–165,000, a 3-bedroom (~85–90 m²) — EUR 190,000–240,000.
Rule 1: No more than 30% of gross income for housing
Origin: The 30% rule comes from the US — the so-called Brooke Amendment from 1969 (originally 25%, raised to 30% in 1981). It's used by HUD (the US Department of Housing and Urban Development) as the official affordability threshold.
How it works: All housing costs — mortgage, taxes, insurance, maintenance — should not exceed 30% of your gross monthly income.
The math for Sofia (single income):
- Gross salary: EUR 1,914/month
- 30% = EUR 574/month for housing costs
- At 2.8% interest, 25-year term, and 20% down payment → maximum loan ~EUR 120,000
- Maximum property price: ~EUR 150,000
With EUR 150,000 you can afford a cheap 2-bedroom apartment in a more remote neighborhood. A typical 2-bedroom in a good neighborhood (EUR 140,000–165,000) is at the edge or out of reach.
Rule 2: Mortgage payment ≤ 25% of net income
Origin: Popularized by Dave Ramsey — one of the best-known financial consultants in the US. More conservative than the 30% rule because it applies to net income (what you actually receive).
How it works: Only the mortgage payment (without other housing costs) should not exceed 25% of your net monthly income.
The math for Sofia (single income):
- Net salary: EUR 1,485/month
- 25% = EUR 371/month for the mortgage
- At 2.8% interest, 25-year term, and 20% down payment → maximum loan ~EUR 78,000
- Maximum property price: ~EUR 97,500
EUR 97,500 for an apartment in Sofia? That's a studio or small 2-bedroom in a neighborhood like Lyulin or Obelya. By this rule, the average Sofia salary isn't even enough for a modest apartment.
Rule 3: Property price ≤ 3–5x annual gross income
Origin: A general guideline from financial planning, used by companies like Fidelity Investments. The 5x multiplier assumes you have no other significant debts.
How it works: The property price should not exceed 3 to 5 times your annual gross income.
The math for Sofia (single income):
- Annual gross income: EUR 22,968
- 3x = EUR 68,904 (very conservative)
- 5x = EUR 114,840 (maximum without other debts)
Even at the most generous 5x multiplier, the maximum is ~EUR 115,000 — below the price of a typical 2-bedroom apartment.
What do the numbers look like for a couple?
If both partners earn an average Sofia salary:
- Combined gross income: EUR 3,828/month → annual: EUR 45,936
- Combined net income: EUR 2,970/month
| Rule | Formula | Maximum property (couple) | Typical 2-bedroom? | Typical 3-bedroom? |
|---|---|---|---|---|
| 30% | 30% × gross income | ~EUR 300,000 | ✅ Yes | ✅ Yes |
| 25% | 25% × net income | ~EUR 195,000 | ✅ Yes | ⚠️ On the edge |
| 5x income | 5 × annual gross | ~EUR 230,000 | ✅ Yes | ⚠️ On the edge |
Summary table: single income vs. couple
| Rule | Single income | Couple (2× average salary) |
|---|---|---|
| 30% of gross income | ~EUR 150,000 | ~EUR 300,000 |
| 25% of net income | ~EUR 97,500 | ~EUR 195,000 |
| 5x annual income | ~EUR 115,000 | ~EUR 230,000 |
| Typical 2-bedroom in Sofia | EUR 140,000–165,000 | EUR 140,000–165,000 |
| Typical 3-bedroom in Sofia | EUR 190,000–240,000 | EUR 190,000–240,000 |
The conclusion is clear: with a single average income in Sofia, a typical apartment is hard to afford by any of the three rules. For a couple, the situation is better, but a 3-bedroom apartment remains a challenge under the conservative rules.
What does the BNB say?
Bulgarian banks don't use these three rules. They follow a regulation from the BNB (Bulgarian National Bank, October 2024) that sets a limit of 50% DSTI (debt-service-to-income) — meaning all your monthly loan payments must not exceed 50% of your income.
This is significantly more lenient than the international rules. At 50% of a couple's net income (EUR 2,970), the bank can approve a payment of EUR 1,485/month — which unlocks a loan for a property of EUR 350,000+.
But bank approval is not the same as financial comfort. With 50% of income going to housing, the questions remain: what happens if you lose your job? When you have a child? When interest rates rise? The bank approves a loan — it doesn't guarantee you a peaceful life.
Which rule should you follow?
There is no single right answer. It depends on your situation:
- The 30% rule is a good starting point for most people — it covers all housing costs and leaves enough for life.
- The 25% rule is more suitable if you want greater financial security or plan to have children in the near future.
- The 5x rule is useful as a quick reality check before diving into specific calculations.
If you can't afford the property you want by all three rules — that doesn't mean the dream is impossible. It means you need to plan: a larger down payment, a longer term, a cheaper neighborhood, or simply more time to save.
Want to see the full picture for your property? Use our calculator — it calculates all costs, checks the three affordability rules, and shows whether you can afford it.