What Percentage of your take home pay goes to your mortgage?

[SaraJayne]

DH has retirement, medical and various other things off his check before it even hits our checking account.

Our 10 year mortgage is currently 18% of take home. We would still be comfortable at twice that, but choose not to be.

 

[budafam]

I chose 35% or less on the poll but that was just based on DH's income which is pretty much what we live on. I also babysit part time and if I include that income, we would be closer to 26%. This is including insurance & property taxes as well. I've been after DH for awhile now to redo our mortgage into a 15 year loan but he is not having it. We're comfortable where we're at. We're able to save and put away money and splurge here and there.

 

[tzolkin]

To me, looking at percentages doesn't make much sense anyways.

If one is making median income, (about $50k,) then 25% would be a substantial amount because there isn't much left over for everything else.

If one is making $150k, then even if their mortgage is 50%, they are doing much better than the $50k person. They have left still more after the mortgage than the $50k person has altogether.

It's just like when the financial people state the percentages you should use for various categories, Gail whatshername comes to mind that was mentioned a while back in another thread. Her recommendation for transportation was, if I remember right, 15%. That doesn't even cover the gas expense for the month for me, let alone insurance, repairs, buying a car, etc.

This is exactly what I was thinking.

Many people mentioning 25%+ and saying they would be comfortable going higher. If we were paying 25% of our income we would not be able to afford to buy food. But I am sure many have double, triple, or more our income so they still have more "extra" money regardless of their significantly higher home costs.

Honestly, I think the % estimates are part of the problem with people not being able to afford their homes. We live in an area where most families make less than $50K. Yet, when you go to buy a home you are told by the bank that you can "afford" a home where the monthly payments are 30%+ of your income. Yes, the people we know who are at 30% can make their payments, but they cannot afford to do anything else. We are at 7% and we can afford to do home repairs, buy the things we need, put a little money into a retirement account, and go on vacation. These are major luxuries where we live. Yes, we could go to a higher percentage, but we would not be comfortable doing so.

 

[Golf4food]

We're right around 24% right now.. but there's factors you didn't account for that are going to change people answers also.

We have our taxes rolled into our mortgage, which a lot of people I know don't... we also have a lot of things taken out of our paycheck, which causes our take-home to be lower than it could be (deferred comp, medical reimbursement acct, medical insurance, even my dinners at work are taken out of it).

This. Ours is 24.12% of our take home pay right now, but that includes the pre-tax daycare spending account, 401k contributions, medical, dental, vision, voluntary life and disability, etc. And our mortgage includes taxes, PMI, etc.

Day care takes up another 13.19% of take home pay, but we do at least get reimbursed on a portion of that slowly over the course of the year and have the max pre-tax deduction taken out up front - still costs as much as a small appartment or country club membership, haha.

 

[LuLuO]

We are just below 20%. We are comfortable where we are at. We were told that we could afford a house about $100K over what we actually bought. No way could we have done that and we're glad we did our homework and didn't listen to the loan officer.

 

[Colleen27]

I think it is hard to really have a truly 100% accurate comparison since there are so many variables. Where we are You can't really 'buy' anything for under $175k unless it is truly a dump and I mean a dump as in scary! think foundation problems potentially uninhabitable... so very hard to compare to say somewhere like FL where the market is bombarded with tons of very nice houses for under $100K.

I agree. We have a very low housing cost relative to our income because we live in a very low cost area. At the peak of the 'bubble' we bought a 3/2 ranch with an attached garage for 99K. After the market collapsed we moved up to a 4/2 in a better location for 25K. And yes, salaries are lower here but not enough to offset the difference in home prices - the median income in my town is about 20% below the national median, but the median housing value is 40% below the national figure.

 

[Kathi OD]

Without taxes and insurance we're at 19%. With...31%.

 

[nene0182]

Ours is about 20% and that includes property taxes and insurance. We are very comfortable with this amount. It's hard to imagine going higher but could if we absolutely had to. We truly love our house and have no plans of moving for many years. We bought our first house with the idea to stay here until our children are grown and out of the house.

 

[barbarabini]

Weighing in with 14% here - wth taxes and insurance.

The NJ real estate taxes - are actually more per month than the mortgage payment (but I dont escrow -but did include it here for the purposes of the poll)

 

[arthur06]

We vary by month...

DW works PT, so her income varies. Last month we were under 12%, this month it will be closer to 16% or 17%.

 

[tink_n_pooh]

Including taxes we are almost one weeks take home pay to pay our mortgage so I said 25% or less, it may be 20% but I didn't feel like doing that much math

Like PP's have mentioned, there are a lot of variables here too since some of us have health insurance, 401K, flexible spending, etc taken out of our checks while others still have those expenses, they just pay them separately.

Oh and we bought our house 3 years ago

 

[branv]

Our PITI is at 27% of take-home income (no escrow or PMI). To break it down, our mortgage/interest is about 20%, our property taxes are about 6%, and insurance is 1%. If I calculate it for gross salary rather than net, PITI is more like 19%.

I don't include in that figure the annual bonuses DH gets (determined by company profit) or my teeny extra income from some contract work (highly variable billable hours).

It used to be a lower % of our income, but last year we refi'd our remaining 25 years to a 15 year mortgage and increased 401K withholdings another 3%.

 

[ilovemk76]

To me, looking at percentages doesn't make much sense anyways.

If one is making median income, (about $50k,) then 25% would be a substantial amount because there isn't much left over for everything else.

If one is making $150k, then even if their mortgage is 50%, they are doing much better than the $50k person. They have left still more after the mortgage than the $50k person has altogether.

It's just like when the financial people state the percentages you should use for various categories, Gail whatshername comes to mind that was mentioned a while back in another thread. Her recommendation for transportation was, if I remember right, 15%. That doesn't even cover the gas expense for the month for me, let alone insurance, repairs, buying a car, etc.

Percentages DO matter when they add up to over 100%.

You claim to spend 22% on PITI, 15% on auto gas and 25% on food as well as carrying CC debt. Those numbers add up to 62% of your net income. That leaves 38% for savings, debt payments, all utilities, your health, auto, and other insurances, house repairs, car repairs, and all other needs.

Do you not see why you have money problems? Gail's percentage are a guide. You can go over in one area as long as you are under in another. The other areas you take from cannot be savings or debt repayment.

What you post sounds exactly like what all of the people on her show say in the beginning. All of them are spending over 100% of their income. The worst I have seen is 3xs their income.

At the end of the show a small number still think the way they did at the start of the show. Most have their eyes opened and see how to get out of the forest by following a path. The path may not be an easy one to follow but it is better than just standing in the woods and digging a deeper and deeper hole.

 

[punkin]

The numbers in the poll actually amaze me. I never realized so many people have such low mortgages (or very high income). If my mortgage was 15% or below (like about 30% of the people who took the poll) we would be living in a cardboard shack. Actually, there is not a single listing in my immediate neighborhood that has a monthly payment amount that low (or anywhere near it - I checked on realtor.com).

 

[ReneeA]

We are at 21% right now - mortgage includes insurances/taxes escrowed in. Our take home has 10% taken out for 403B and then health insurances, etc. We just bought our current home a year ago as a foreclosure. It's a new colonial that a builder walked away from before it was finished. Luckily, DH is in the trades so we had plumbing, heating & cooling, flooring, and all finishes done by people DH knows at a steep discount. When the house was first listed on the market, it was listed for 3x what we paid for it...they didn't sell it, the builder went under, and then it sat emply for 5 years.

Our old home we currently rent out, but only make $120 a month on that. We don't consider it an "income property", rather just make ends meet so we could move into a home we now fit into.

 

[ilovemk76]

The numbers in the poll actually amaze me. I never realized so many people have such low mortgages (or very high income). If my mortgage was 15% or below (like about 30% of the people who took the poll) we would be living in a cardboard shack. Actually, there is not a single listing in my immediate neighborhood that has a monthly payment amount that low (or anywhere near it - I checked on realtor.com).

The thing that is not accounted for is how far you are into your mortgage.

If you just bought your home, your % will probably be way higher than it will when you are in the last year of your mortgage.

 

[charming23]

I handle the finances for my mom and she pays 23% of her take home pay on the mortgage, insurance, and taxes.

 

[Eeyore98]

Our actual mortgage on the house we had to move away from...less than 15%. Well, technically, our renter covers (most of) that, but if we were still living there...

The rent for the place we're staying in now? Just over 25%. Yeah, I was NOT happy, but that's what happens when you have to find, apply, and be approved for a place within 3 weeks, and do it mostly from another state.

 

[Eeyore98]

The numbers in the poll actually amaze me. I never realized so many people have such low mortgages (or very high income). If my mortgage was 15% or below (like about 30% of the people who took the poll) we would be living in a cardboard shack. Actually, there is not a single listing in my immediate neighborhood that has a monthly payment amount that low (or anywhere near it - I checked on realtor.com).

Well, ours is an 800 sq. ft. home in a neighborhood with a meth lab at the end of the street, if that tells you anything.

 

[mrodgers]

Well, ours is an 800 sq. ft. home in a neighborhood with a meth lab at the end of the street, if that tells you anything.

Wow, thought my 1000 sq ft house was small. Ours is tiny. Hope you don't have kids. I have 2 girls, so with 3 females in the house, its going to get crazy with the single tiny bathroom in a few years.

We don't even have room for a table to eat on. No dining room and kitchen is way too small.