What percentage of your take-home pay do you spend on rent/mortgage?

[mentos]

What percent of your take-home pay do you spend on rent/mortgage?

This does not apply if your mortgage is paid off, you live rent-free with your parents, or you're that dude who lives in his car.

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[lord999]

0 for the mortgage/6-8% on taxes, insurance, upkeep, and repairs. I take the German point of view that it's a wash under low inflation scenarios between rent and own. Home maintenance is a significant amount.

 

[CetiAlphaFive]

What percent of your take-home pay do you spend on rent/mortgage?
This does not apply if your mortgage is paid off, you live rent-free with your parents, or you're that dude who lives in his car.

You forgot to ask if it's a 15 or 30 year mortgage

 

[TranslationalRPh]

What percent of your take-home pay do you spend on rent/mortgage?

This does not apply if your mortgage is paid off, you live rent-free with your parents, or you're that dude who lives in his car.

Totally agree 0% should be an option given that 1/3 homes don't have mortgages. Our house is paid off too.

 

[gwarm01]

I'm sitting right around 24% currently. I'm in a high CoL area and am the sole earner. That's a higher percentage than I have paid in the past, but my lifestyle hasn't suffered much. However, my stock portfolio has been neglected lately.

 

[owlegrad]

About 13% but that is a little misleading. Once you throw in HOA and general home owning expenses it is probably more like 25%. And that isn't even considering property tax, although in Florida we do get homeowner exemption so that's nice.

 

[sakigt]

10ish% on a 15 year with 11 left
Dual income with kiddos
Spend more on student loans, slightly less on childcare

 

[PA_dud3]

Just live in your car

 

[BC_89]

It’s going to be hard for me to interpret some of these responses without wanting to consider PMI, property taxes, and any extended rental/homeowner insurance coverage....I’ve always considered these as part of the “package.”

Curious also if users will consider own income or dual income on a 15 or 30 year payment plan.

 

[lord999]

It’s going to be hard for me to interpret some of these responses without wanting to consider PMI, property taxes, and any extended rental/homeowner insurance coverage....I’ve always considered these as part of the “package.”

Curious also if users will consider own income or dual income on a 15 or 30 year payment plan.

Congrats on your mod promotion!

 

[BC_89]

Congrats on your mod promotion!

Thanks!

(SDN just created a Veterans’ Benefit forum this past Sunday and I was placed for it with one other on it! Hope it serves its purpose)

 

[BidingMyTime]

My house is actually paid off, but I answered based when I was still paying on it. My advice, 25% - 35% is reasonable for a house payment, 40% should be the upper limit. Of course, if you live in LA or NYC, 40% is probably the barest minimum.

 

[mentos]

My house is actually paid off, but I answered based when I was still paying on it. My advice, 25% - 35% is reasonable for a house payment, 40% should be the upper limit. Of course, if you live in LA or NYC, 40% is probably the barest minimum.

Nice advice. Did you have a 15 or 30 year? Did you make extra payments?

I would be scared of losing my job if I had to pay more than 40%!

 

[bacillus1]

19% of after-401k pay on a 15yr loan when you include insurance, taxes and the big HOA you get from living in a high-rise. I guess it'll be a higher percentage now that I increased my 401k contribution.

When I lived in NorCal, it was about 26% on rent of a 386sqft studio.

 

[BidingMyTime]

Nice advice. Did you have a 15 or 30 year? Did you make extra payments?
I would be scared of losing my job if I had to pay more than 40%!

30 years, and yes I did make extra payments semi-regularly.

 

[pezdispenser]

You did ask for take-home pay but lenders normally use gross when calculating debt to income ratios. Take-home pay can change a lot depending on things like 401k, health insurance and if your W4 withholding is set correctly.

Anyway, when I was stupid new grad I bought a house with a $310k 6.25% 30 yr mortgage, so the payment was $1,900, plus insurance, property taxes, PMI and HOA ending up being around $2,800/mo. That was ~45% of my take-home pay, and it was probably the worst financial decision I've ever made. Somehow I managed to turn things around and get out of that debt hole by doing tons of OT and living frugally until I paid it all off.

I would recommend only ~25% of take-home pay on a mortgage/rent. This gives you some room to spend on other things, or pay extra on the mortgage, or save up for a downpayment.

 

[rxdawg21]

21% on 15 year. Two pharmacist household making <120k each (VA job) and maxing out 401k for both and hsa and dependent care fsa for one

 

[Momus]

You did ask for take-home pay but lenders normally use gross when calculating debt to income ratios. Take-home pay can change a lot depending on things like 401k, health insurance and if your W4 withholding is set correctly.

Anyway, when I was stupid new grad I bought a house with a $310k 6.25% 30 yr mortgage, so the payment was $1,900, plus insurance, property taxes, PMI and HOA ending up being around $2,800/mo. That was ~45% of my take-home pay, and it was probably the worst financial decision I've ever made. Somehow I managed to turn things around and get out of that debt hole by doing tons of OT and living frugally until I paid it all off.

I would recommend only ~25% of take-home pay on a mortgage/rent. This gives you some room to spend on other things, or pay extra on the mortgage, or save up for a downpayment.

Must have bought at the at 07-08 and never refinance? 6.25% rate was high.

 

[pezdispenser]

Must have bought at the at 07-08 and never refinance? 6.25% rate was high.

I bought in 2008. It was hard to refinance because I was so far under water, but I managed to pay it down to 80% of the market value of $260k and refi to a $208k 15 yr mortgage at 4.25% in 2010. The monthly payment was $1565. After that, it wasn't worth the closing costs to refi again, so I just paid it off aggressively by 2015.

 

[radio frequency]

28% of after tax/take home pay. This cost includes property taxes and home insurance. After tax pay represents after health insurance, 401k/403b, max HSA, and dependent care account, and all other various deductions. Not considering spouse’s income. 30 year.

Total mortgaged amount remaining is 1.46 times my annual pay. If I left property taxes and home insurance out of the equation, it would be ~19% of take home pay.

Don’t get me started on the maintenance costs though. That has been a beast so far.

 

[mentos]

I would recommend only ~25% of take-home pay on a mortgage/rent. This gives you some room to spend on other things, or pay extra on the mortgage, or save up for a downpayment.

Does this apply to 15 or 30 year or both?

 

[Rainbowdash]

Zero. House paid off. Husband does all the maintenance himself.

 

[mentos]

Zero. House paid off. Husband does all the maintenance himself.

Nice how long did it take? Did you pay it off aggressively?

 

[pezdispenser]

Does this apply to 15 or 30 year or both?

Both, but I recommend going for a 15 yr if you can. The interest rate will be around 0.75% lower, and you'll build up equity much faster. Pay it off in 15 yrs or less, then spend your money on other stuff, or retire early. However, you won't be able to borrow as much as a 30 yr with the same payment, so it may not be feasible in expensive housing markets.

 

[TranslationalRPh]

Both, but I recommend going for a 15 yr if you can. The interest rate will be around 0.75% lower, and you'll build up equity much faster. Pay it off in 15 yrs or less, then spend your money on other stuff, or retire early. However, you won't be able to borrow as much as a 30 yr with the same payment, so it may not be feasible in expensive housing markets.

We did a 15 year at 3.25% and paid it off in 4.5 years in a pricey area, but it was our only debt.