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What percentage of your income should be used on your mortgage?

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Anonymous
Not applicable

Re: What percentage of your income should be used on your mortgage?

33% is an ideal back end me thinks.

Message 11 of 15
Yodafer
Established Member

Re: What percentage of your income should be used on your mortgage?

I think 25% of your TAKE HOME pay will allow for a comfortable life.  That is what I am using.

Message 12 of 15
FrugalRican
Blogger

Re: What percentage of your income should be used on your mortgage?

Aim for 25% or lower. Just the property taxes, insurance, and other expenses alone can get you up to 33% and it shouldn't be going any higher than that.

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Message 13 of 15
Anonymous
Not applicable

Re: What percentage of your income should be used on your mortgage?

I don't think it makes sense to simply state a percentage, as the percentage will be a moving target depending upon the salary. If you make $20K a month, then you might very well feel comfortable with a 50% DTI, because you could likely live on what is leftover; whereas, if you only make $2k a month, it could be darn near impossible to live on the remainder if your DTI is 50%.

 

Also, it seems like (from what I have seen, and also from personal experience), the calculators that are out there don't always factor in things like your retirement contributions. My DH and I have a comfortable 6 figure income, and the calculators said that we could go 45 to 50% on DTI, however, we ended up with a 29% DTI (and we have no debt other than our mortage), but due to the fact that we contribute the maximum amounts into our retirement and HSA accounts, we certainly are not living high on the hog; and in fact, I feel a bit house poor.

Message 14 of 15
Anonymous
Not applicable

Re: What percentage of your income should be used on your mortgage?

I absolutely love a beautiful and sprawling house but often times excessive pride and maybe a little bit of ego get in the way (ok, a lot of times) and we/I can end up with a boat anchor of this beauty. In my old age I've learned that a compromise between beauty and practicality leaves more for that retirement and frankly, some bucks leftover to play.

Message 15 of 15
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