How do lenders calculate net disposable income?

[Brendan Burgess]

Presumably it's net income after taxation less

other loan commitments ?

What else is deducted from the net income after tax?

Does it vary from lender to lender?

 

[NorfBank]

That's basically it, some will subtract a sum per child too so it does vary from lender to lender.

The more you earn the higher % of NDI the banks will allow you to use for mortgage repayments.

e.g
earn up to 30k - you can use 25% of your NDI to service the mortgage
earn over 45k - you can use 30%.

This also varies from lender to lender.

 

[SadBob]

I've been wondering about this myself too so just to expand – I have pension contributions and pension levy (which are statutory deductions) as well as the usual tax, PRSI and income levy. I also have a number of voluntary deductions such as annual tax-saver travel pass, VHI, income continuance plan, union subs, critical illness cover. Is it as simple as looking at your net pay figure on your payslip or will these voluntary deductions be taken out of any calculation in determining 'actual/possible' net income for mortgage purposes?

thanks

 

[Brendan Burgess]

I have looked at some of the lenders' websites and can't find a worked example. Has anyone else got a worked example?