Kvar att leva på (KALP)
KALP, kvar att leva på (left to live on), is the calculation a bank makes when you apply for a mortgage. The bank takes your income minus a high stressed mortgage rate, amortisation and a standardised living-cost figure. If a surplus is left, you are considered able to afford the loan. It is the heart of the credit assessment and decides how much you can borrow.
How the bank calculates it
The bank starts from the household's after-tax income and deducts three things: the cost of the mortgage at a high calculation rate, the amortisation required by the amorteringskrav, and a standard figure for what you need to live on. What is left is your KALP. If it is positive, with margin, the loan is approved. If it is too low the bank lowers the loan amount or says no.
The calculation rate is high on purpose
The calculation rate (kalkylränta) is deliberately higher than the rate you actually pay, often around 6 to 7%, to test whether you could cope if rates rise. It is not set by law but by each bank, so the same income can give different borrowing room at different banks. That is why it can pay to compare more than one lender.
A standard for living costs
The living costs in the calculation are often based on Konsumentverket's reference values for what a household needs: food, clothing, hygiene and the like. The more people in the household, the higher the standard figure, and children are counted in. The operating cost of the home itself is added on top. A sound credit assessment is required by the Consumer Credit Act and supervised by Finansinspektionen, but the actual numbers are set by the bank.
Where it shows up
- Mortgage