What % of your income goes towards your mortgage?
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Anonymous
| My partner and I currently own and bought a house we could afford on one income. So, it’s relatively low compared to our combined income. And that’s been great for us. The internet budgeting experts suggests that housing should be, what, less than 20-30% of after-tax income? We’re considering a move with a higher mortgage. And we’re curious what % of take home2mortgage people are really comfortable with and or living with? |
Anonymous
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It depends on your goal, risk level.
Ours is 5% of gross. We also want to be able to pay the mortgage from one income. But, our HHI is about $300K so it kind of skews things. We're also older (50s), but even in our 40s, we didn't want the mortgage rope around our necks, so we bought below what our mortgage loan was approved for, and put a large downpayment. |
Anonymous
| About 28%, including taxes and homeowners insurance. |
Anonymous
Same. For me, that is 28% of my take home. |
Anonymous
| 10% of gross income. I don't know what our net income comes out to. This is piti, not just mortgage. |
Anonymous
When did you buy, what was your down payment, and are you in the DC area? Because a mortgage payment of $1250/month around here is so unusual it's virtually useless for discussion purposes. Ours is 10% of gross, which is ~$500k. $750k mortgage at 2.625%. PIT is around $4100/month; that does not include insurance. |
Anonymous
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HHI is around $390K and our monthly mortgage is $3900. So we are doing about 12% of gross income.
We stopped renting out our basement apartment during the pandemic ($2200/month). If we resume that, our monthly out-of-pocket cost for housing is like 4% of gross. Basement units are amazing. So many dumb tax breaks. |
Anonymous
| Ours is about 15% of our gross income. |
Anonymous
Also want to say, this is totally comfortable for my family in our current circumstances, but it is much more than we used to pay...when I had two kids in childcare, I needed more flexibility in my housing costs. So it *really* depends what else you are paying for, OP. |
Anonymous
| Only like 10% of our gross goes toward our mortgage. We bought a $700,000 house and make $550,000 per year. |
Anonymous
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Keep in mind that most other expenses don't scale linearly with income. So, the higher your income, the easier it is to maintain a higher percentage going to housing if that's what you want. You also have to factor in kids, student loans, etc. Rules of thumb are a poor substitute for writing down your own budget.
We're about 18% of pre-tax income (~250k), so something like 27% post-tax. It's definitely not an issue at all, and it was considerably tighter than that with no issues before we refinanced in early 2021. Stretching a little bit at the outset for a good location has paid off handsomely in terms of appreciation as well. Ultimately, you just have to decide if housing is something you want to prioritize in your budget or not. |
Anonymous
OP the problem is you’re going to get weird flex responses like this one. People aren’t rushing to admit how house poor they’ve made themselves in order to have access to public schools they think are good enough and a reasonable commute. It’s unpleasant to think about and to type. |
Anonymous
| 25% of our gross income goes to mortgage & property tax. No regrets. We see it as an investment & enjoyment of our home. |
Anonymous
| I know GROSS is what everyone looks at, but I think looking at NET is what you should be looking at if budgeting on a month to month basis. We NET $15K a month, mortgage + taxes and insurance is right at $5K. Our GROSS is probably closer to $30K but we max 401K plus catch up contributions, and we withhold "0". |
Anonymous
| 10% of gross at the moment, 225k HHI. But we will be moving in a couple of years when kid starts K and that house will be much more expensive. |