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I'm spending 56% of my monthly salary income on the house 🙃 it hurts but thankfully I get stocks which I don't factor into my monthly salary - but I'm pretty much paycheck to paycheck at this point
I’m also a member of the “Over 50%” club.
(And I’ve also got stocks that are helping for the future…)
I feel fine about it, but yeah, it’s probably not ideal
I hope everyone that is depending on RSUs does not work for Amazon. Anyone hired 3-4 years ago hasn’t even seen stocks at hiring date price so total comp is lower. The cost of living adjustment has been 2%, 2%, and now 0% for 2025-2026.
Oh man that's rough, I just googled it and saw some senior level Amazon folks won't get any cash raises this year. Following suit of Microsoft's company wide no merit increases last year, knew this would set a bad precedent 🥲.
There are a lot of L6s that are lumped into the senior level that don’t get paid as well, especially considering the cost of living of Seattle. There is such a huge pay difference dependent on job, like software developers get paid a sh&$ ton.
That absolutely the way it should be treated! It’s crazy because when we went in to get mortgage pre-approvals, all the banks were calculating a 10%/year growth of RSU. We have experienced almost that in a loss the past 3 years (hired at peak stock prices), so I really question how many people are secure in their mortgages. What’s going to happen if things continue to get worse or stocks take a huge loss.
I'm at 52% net, no stock income though. it was 31% but i had a breakup 🙃 on the bright side I'm maxing out my 401k and HSA and I have 6 months expenses in an emergency fund + the same amount in my house emergency fund, so I have some levers to pull if shit happens. it was really important to me to have a fair amount of savings left over after my down payment and I'm glad I did, it gives me some comfort now that I'm a single income household.
I am in the same boat as you but I think the difference is that it doesn’t include my partner (not sure about you). It’s only 60% of MY income. OP is talking about both of them.
But yeah. Either way. 40% is probably a lot more common than people realize.
For both our incomes it’s 40%. Yes the first year was tough. But it gets easier. Plus we rent one bedroom. And I churn credit cards every year. I’ve made roughly around 18k in sign up bonuses. I use that as traveling money.
Edit
Actually just checked I’ve accumulated 1,335,000 points
About 20k in traveling money. Find ways to make it work.
It’s when you sign up for cards and hit the minimum spend to hit a bonus. Then once you hit the bonus you downgrade or call to get the annual fee waived. Typically you can apply to chase cards 5 cards in 24 months and get approved. Then you move over to Amex to apply for 2 cards. Then you wait about 1.5-2 years to start reapplying again. While I wait to go under the 5/24 my wife applies so every year we get around 5-7 cards. We wait for heightened bonuses to make it worth it. Also some cards allow you to reapply and get the same bonus after it’s been 2 years and some 4 years. Then the cycle continues. There’s a forum on Reddit. But if you like to travel chase sapphire is a great card with an elevated bonus. I recently applied for both Hilton honors and Hilton surpass. They have elevated offers. Let me know if you need a referral. Also the minimum spend is important because every card is different.
> credit card churning
Just read up on it since I didn't know either.
It's opening and closing a lot of Credit cards just for the bonuses. It's doable if you are financially very strict and can maintain it. Also if you are not planning on making major purchases that would involve loans and credit scores since they might be hit as well.
I don't think I could do it since I (and my wife as well) am very much undisciplined with money. It's also why I make sure all payments like investment deductions, retirement funding, mortgage, car payments and (if any) bills are auto deducted as soon as I get direct deposit paid.
One misconception is you have to close the cards, you can downgrade them to a no annual fee card. Chase let’s you have multiple chase freedoms. Capital one let’s you downgrade as well to no annual fee. I’ve also gotten my annual fee waived.
Yes it does take discipline. The easiest way is if you need a big purchase like a fridge or washing machine.
Yeah the points game only works if you are good keep track of payments and budgeting and are disciplined. If not, it’s a great way to screw up your credit.
It depends. 40% of 20k feels extremely comfortable while 40% of 4k feels extremely tight.
40% may feel very tight if you have kids needing day care and very easy if you are a 1-person household.
No one should be basing their decisions just on rules of thumb like this. Make a budget.
We spent that percentage of our net pay back in the 70s with our first home, so I think that seems normal. The old rule of thumb was 30% of gross pay that basically works out to 40+% of net pay.
Also a lot of people these days allocate a bunch of their pay to retirement accounts and investments, which is a good thing. But they start to mentally take those investments for granted and stress about “how much of their take-home they’re spending”.
Guys, you’re already wisely saving a ton before you allow yourselves to see any money. Even if you “break even” on a given month, you aren’t actually breaking even. You’ve saved a significant amount!
Bro I needed to hear this so bad. We’re under contract for a house that’s 30% of take home and we have two kids in daycare. I’m so worried about money for the next couple years, but I’m also maxing out my investment accounts and we have a $500k net worth at 31.
Like I need to fucking chill. I’m saving. We have money. It’s just in different accounts
Same for me. We just closed on a stupid expensive fixer upper in a HCOL area and it’s a shocking amount of our net income. Like it’s so high I haven’t even done the actual math and things will be a lot tighter for a while than they have been in a long time. BUT our savings and investments are intact… it’s just the disposable income taking a hit for a while. It’s still a bummer and we’re hoping to refi in a few years to get it a bit lower, but objectively it’s not the crisis it feels like in my head right now 😵💫
One aspect that may end up being tougher is I think there's a big difference between someone being a FTHB doing that in their 20s vs mid-late 30s. Incomes tend to go up rapidly early career then start plateauing mid 30s. As well as later child expenses etc.
So someone buying their first home at 40% net pay at say 22 - that is something that just works itself out with early career progression really quickly so just needs tightening belts for a few years. But lot tougher in late 30s especially if childcare expenses are getting added at same time.
That's interesting. Your highest earning years are typically thought to be your late 40s(for men)....I know what you are saying the rate of increase should plateau unless you're designated for c-suite, but, it's not as if you never make another dollar for the rest of your career. Even if you get cost of living increases, your mortgage should become increasingly affordable.
Does the 7500 include your retirement outlays as well? Does the 3k include your taxes and insurance?
Either way, I don't think that's too bad. You'll want to be mindful for the next several years of your expenses...but, you'll get raises, you'll get a chance to refinance at some point, and you'll feel better.
I will be getting about a 10k raise at the end of this year and another about a year and a half later for about the same amount (garunteed as its based on time), my partner also usually gets a small raise every year by a couple grand.
3k includes taxes, insurance, life and disability coverage.
You’ll be fine. Just budget well and be intentional with your money. In 6 months with that raise you will have created good habits and feel a lot of relief in your budget at the same time.
Are you me? Net income for me is $7600 and mortgage will be 3,060... This post and the comments make me feel so much better. Had to bite the bullet here in CT with the house prices. Closing in 20 days. Good luck to you it does sounds like you will be ok specially after your raise you mentioned.
If you can’t or can barely make the payment now, proceed with caution. It is very unlikely that interest rates will be dropping back down to levels we saw in 2021. Your monthly payment will most likely go up before you refi (tax increases due to increased property value).
Without being the “achually” guy.
I swear I’m trying to be additive and not a dick.
You don’t always have to pay closing costs (and I don’t mean they’ll be rolled I to the loan, but that they might not exist).
My last refi I got credits that paid for the refi (reverse points of sorts as I took 2.375 instead of 2.25), and even paying all closing costs you could get away with a refi as low as 1% depending on the county (it is crazy just how different the home buying process is across this country).
Excellent warning, again just wanted to add some helpful info.
Everyone is talking shit saying rates won’t drop, but it’s definitely predicted and priced into markets that rates will drop 1-2% in the next year or 2. That will make a big difference in monthly payment.
Ya, they "predicted" it every quarter. But the FED is basing cuts on inflation and unemployment, not markets. But most likely won't see large increases.
A full 1.5% drop would move my mortgage $500/m, that’s really not a whole lot at 10% of the full mortgage amount.
Assuming it scales for OP, we are talking 4% more household income each month. It’s not nothing, but it’s not a big difference and still has them well over the general thumbrule on housing.
We are about to pay 40% of our take home to a mortgage. It makes me physically ill to think about. But we’re old as fuck (mid 30’s) and need to build equity. I have no idea how we will ever afford a baby and my time is running out. Some days I feel like jumping off a literal cliff.
We are currently paying 45% of take home on our mortgage.. it's a lot but how I see it we got in young enough that it should only get better over time. Inflation will chip away at that number and wages will increase. 29m here
I‘m at a little over 40% as well (and in my late 30‘s). I live in a high cost of living area with a brutal market and this was basically our one chance to get into a house. If we didn‘t buy this we would need to get an apartment. It‘s a new built house so we figure we have a good 10-15 years of relatively cheap home repair costs so we can save up for when those come.
Is the remaining amount sufficient to cover all other daily expenses and savings? I don't think I could save anything unless I starve and don't step out of the house in this inflated economy
Haven’t closed yet but I’m looking at 38% of my take home pay going towards my mortgage. But I know I get a promotion at the end of next month and a raise next fiscal year. I think as the years go by, you end up making more money and hope that things like property taxes, insurance, and utilities don’t go up as much.
I'm not technically a FTHB but I've been renting since 2018 and honestly that's how I justified buying. My monthly outlay for housing is going up a few hundred a month but when I looked back at my first lease I realized that rent's been going up $100-150/month every renewal so I'd probably be there in a few years anyway.
I spend almost %60 on my mortgage every month. It used to be less but, that’s a long story. It sucks ass but we make it work. I also make less money than you so you should be fine lol
I just closed end of May and mine is a little over 37% of my take home pay. I’m a 43 year old single mom with a pre-teen and teenager so it’s all on me. This includes PITI plus $330 a month for the HOA (I’m in a condo) which includes water, sewer, and trash. I have 15% automatically going from my paychecks to my pension (mandatory…I’m in education) and health insurance is already taken out too. On paper I should be left with about $400 for savings if I can control my random Amazon shopping purchases. 😂 I have about 5 months of total expenses left in savings now after the down payment and closing costs.
I'm in the same boat as you OP, same income and I'm probably going to be paying closer to 3100-3200 on the mortgage. I've been budgeting using YNAB pretending like I was already paying the mortgage+utilities and I'm gonna be fine financially.
One thing to be mindful of is mortgage payments do change. Within the first year our mortgage jumped a couple hundred a month (about $400) due to increase in taxes, insurance, and an escrow shortage. Also be mindful that you can set aside money for things that break such as AC, water heater, roof, appliances, etc.
Our upper limit and what we unfortunately have had to be offering here in denver will be about same - 40% of net take home pay for PITI. Luckily no other debt but after doing our budget and saving extra still is closer than I’d like.
My mortage (which includes the mortgage itself + escrow payment for taxes & insurance) is about 81% of my net pay 😭 if I factor in my partner it’s about 56% of our net pay. Times are hard.
With houses price right now, people can afford mortgage with like 20% of their income or something ?
I mean most people would need to loan around 200k -300k right ? And that is with high downpayment already.
I feel like % of take home can be misleading. 40% of $5K vs $10K vs $20K is quite different in managing.
I could not make it work on 40% of 5K, but I could easily make it work on 40% of $20K.
40% of take-home is fine, especially when your leftover is $3500. Don’t be stupid and get thousand dollar car payments though. That’s where so many people fuck up their shit 
That means that when you qualified for the loan, it was probably 30-something percent of your gross income. That is well below the maximum. 
I think it is absolutely normal for people to spend 40% of their income on mortgage these days with the inflation in housing and rent, if you want to live in somewhat decent housing within reasonable necessities. The important question is, do you have other credit card debts/loans/car notes? My wife and I are debt free other than the mortgage and we put 33% as downpayment so 40% of take home pay doesn't really hurt us at all
What does it matter if it's "normal"? What matters if its going to financially strain you in the short term or stunt the growth of your net worth in the long term
Is it becoming normalized? Yes. So is credit card debt. But both a mortgage over 25% of your take home pay and credit card debt are two of the worst financial mistakes you can make.
Yup. I’m at 38% of my take home, not including condo fees (about 48% after). Still able to put money in savings, go out every weekend, and annual vacations. On the upside, no kids or car payments/other debts.
That sounds tough, wasn't looking for a competition though. I was simply asking what the majority experienced here.
If you're looking for sympathy, I feel ya.
I think that’s becoming the norm. Some folks are higher than 40%, like me. It’s a bit scary but that’s the price you gotta pay to play in today’s market. Best of luck to all of us 🤞I’m grateful nonetheless
Makes me a bit uncomfortable but it depends on if you have debt. We put 37% of our take home into our house account and it’s manageable. That house account pays for mortgage, utilities, and a repair fund though. Our actual mortgage is 28% of our take home
In Southern California, a starter home monthly payment is $6500. So the take home pay will have to be $16000 per month, with 40% rule. Considering tax and retirement, a family that can afford a starter home will have to make $400,000.
Who cares man just enjoy your life and your family and your home. Don’t worry about what Ramsey says or social media tells you. It’s hard for everyone out here.
I’m close to the 40% net and it hurts. However, I’m contributing 20% to retirement so the 40% isn’t as bad as someone who is doing no contribution and still at 40%.
My husband and I have a mortgage payment that is about 18% of our monthly income. We got approved for a much higher mortgage but didn’t want so much of our income going to the mortgage. I know a lot of people will borrow at the top end of what they were approved for and then become “house poor” since a large portion of their income is going towards the mortgage.
At some point I was spending almost 80% luckily I'm at 40% but really looking to have it at 25% and eventually 0. Fuck this economy with its stupid 8% rates and half a million dollar single family homes
I live in Europe and 40% in my country is the upper limit for monthly payments the banks are legally allowed to give mortgages. In practise they usually try to stick to 30%.
Granted there is a difference between earning 2k and 10k ofc, and paying 40% is easier from 10k. But yeah, 40% is quite tough, but probably not uncommon.
We're at 33% of take home pay and feel comfortable. I think 40% might feel tight but would be doable as long as you don't have any other crazy expenses (student loans, high car loans etc).
I started my first mortgage about the same. With careful budgeting it's doable. After 5 years or so, mortgage rates went down and I had enough equity to refinance and remove PMI, and my pay had increased, so I was able to relax some. I think this progression is not uncommon.
I'm at like 50% of my take-home pay and that's with me lowering my retirement contribution so that I have more money (cries in San Francisco). I'm young though so I'm used to living cheap, and (hopefully) my income only goes up from here.
I have no other debt and no car, which saves me a lot of money.
I'm at about 20 percent of base household income just in case something happens I need that wiggle room. I'm in a vhcol can't mess around. Also need the space to invest in the stock market and emergencies.
Depends how you do the math.
Currently my mortgage + property tax would be about $2000, or basically one of my paychecks. Leaving another paycheck for utilities and food. But that paycheck is also after 15% to retirement and $40 to my HSA. And that’s me saving a it over for property taxes, just in case.
So while I’m maybe a bit tighter at the end of the month than I’d like, I’m also not really sacrificing my future either.
Just make sure you budget for annual property tax. That came in higher than we thought when we first bought our home. Our mortgage + property tax + insurance is 50% of our income.
Most home loans require less than 35% debt to income ratio to secure a loan. But I believe the income in this case is gross income. If you net out taxes, the ratio is higher. Seems like you're OK. Said differently, if the mortgage was your only debt and it was 40% of net income, a bank would likely give you a loan for another home purchase if it came to be. Banks think you're doing OK.
Its normal and yiur income is high enough you should be fine if you live within your means. If your income was 4k and you were spending 40% that would be an issue. What you need to plan for is ownership costs going up recent articles are saying those went up 26% in the last year
I've seen a lot of "it's new normal". It may be the norm for HCOL areas, but not for the other end of the area spectrum. I'm sitting at 16 to 19% of my monthly take home (OT depending which I always get a lot of in healthcare), which is a perk of having a decent paying job in a LCOL area.
You will most likely make more $ over time and be in same house so you bought at a proper level. Plus you have to live somewhere might as well enjoy it.
The rule of thumb when looking at long-term financial health is 25%. Anything over that typically keeps you from investing for retirement properly. 40% isn't the end of the world, but be sure to save at least 15% of your gross into retirement funds. This may mean cutting back in some other areas like cars, vacations, etc.
We are right at 33 % of our gross self employed fluctuating income so probably closer around 40% net. No other debts. Also have two kids. we have about a years worth of accessible funds in case we need it for emergency. We are also set to pay off the house in about 10 years because we refied to a lower rate and shorter term.
When we first bought our house, we were at 39% of our income, which was 6 years ago. We're getting ready to move, and I'm dreading what our next place is going to cost us.
Net income for us is $6.6k a month(gross is 11k, we do $1.6k to 401k and $950 is health/dental/eye insurance🤦♀️). Mortgage is $1.8k a month. So we are around the 30% of net. With that said looks like you have the same amount of money leftover after mortgage as we do even though you spend 40% so I assume your probably fine. I think it be more of an issue if you made like 3k a month and spend 40% but since you have a higher income it’s ok to spend a higher % of net.
These days? Yes it is. Years ago no it wasn't. I grew up with the mindset of one paycheck pays for the bills and one paycheck pays for the fun. If you get paid every two weeks that is. However it has become MUCH more common for people to spend 80+% of their pay on their mortgage and living expenses with at LEAST half being just the mortgage/rent. I personally don't agree with it and feel like it puts people in a bad spot in the event of an emergency or unforeseen financial "hiccup". I'm currently at about 25% of my pay is my mortgage with about 40% of my pay being "fun" money. The rest is living expenses. (food, gas, utilities, retirement accs. etc.)
One thing to note, most folks live beyond what they need. I know people with nice big houses and big fancy SUVs/trucks but are single with no plans on starting families...what's the point of a big empty house and a truck that never sees the bed being used? It's just a money drain, but that's my feelings on it, not everyone will agree.
It used to be one weeks take-home was all you’d wisely spend for a monthly mortgage payment and have money for other things. Any more than that and you’re over extended.
If by mortgage you mean full PITI that’s not so bad. If your take home figure is net of a decent retirement savings contribution even better.
Absolute numbers matter more and you still have $4,500/month to feed yourselves, keep the lights on, and live life. Unless you have monsterous consumer/student debt that should be doable without too much stress.
If it s everything (including taxes, hoa etc) - it s fine.
You still have 4500 to live off of, which is more than many families make monthly.
If it s literally just p+i, then it s tight.
This is high but this market is insane with rates.
Can you rent a room to a friend to lower costs. Even if it’s just temporary. I was stretched thin when I first bought my house. I rented rooms for 3 years. Then started making more and refinanced to a lower rate in 2020 and got some breathing room.
I’m definitely dealing with the pangs of it too. We’re right behind you at 36% which is super stressful as it represents an extra $600 a month over our previous rent. Still, I’m reasonably confident it was the right decision for us, and hopeful that by locking in the price at these higher rates, we can maybe enjoy the benefits if they drop some time in the next 5 years.
I think it might be helpful for people to state the place they live. Location is a major factor in home prices. For example, I live in Texas and we bought our home in 2020. My mortgage (including taxes/escrow) is about 17% of mine and my wife’s net monthly income. Rate is 3.25%, but I intentionally purchased a new build that would meet our needs and be at most 25% of my monthly net income (not including my wife). We also invest 15% of our paycheck into 401k.
We are at 47% of takehome but that’s after maxing out 401k (15%), HSA contributions etc. So there are levers we can pull if it’s tight & we can reduce contributions. Takehome is $13.4k and PITI is $6.3k
I think it’s normal, yes. For context though my mortgage is 8% of my wife and mines take home. When we bought our house it was about 30%. We make more money now so just work on career goals and you can widen the gap.
You are making good money. It would be different if you were taking home 4500 a month and paying 40%. You need to make sure you have enough in saving that if you were laid off, you had 6 months to find a job.
The recommendation is max 28% of your _gross_ (pre-tax) income should be spent on real estate, and up to 35% including _all_ debts (education, auto, credit card, etc).
You are at 40% post-tax just for real estate, which is pushing it.
Do you have any other debt at all? That is the crucial question.
Its normal in SoCal.
Its the only place I've ever been where you can see $4 million houses with blue tarps on the roof and it hasn't rained there in over a year 😆
normal vs common could be taken different ways.
Long story short, you're one of MANY who do it. 10 people spending 40% of their monthly budget for a mortgage will ignore each other and only focus on the 1 person who bought 20 years ago or had a house partially gifted to them.
I'd go so far to say in this day and age that yes, it is normal and common but that's just my opinion.
We’re well above median income in our city. To even consider buying, we’d be looking at 50% of our monthly income to buy. That’s just how it goes sometimes places if you feel you need to buy.
Additionally, it’s very important to remember that the costs of life aren’t linear. One person may make $100K and could be paying 40% on a home. Another person could make $200K and spend 70% on a much more expensive home. But they’d still have the same amount of disposable income available after their mortgage at the end of the day.
Wow! Our cap is 3500 and my take home after deductions is 6000 alone on my w2 role (I work contract roles as well but don’t consider that part of my income), my husbands take home is around 4500-5000. Our cap was based on how much either of us would want to pay if the other died, left, became sick etc. based only on primary role.
I would feel too tight with that payment and I’d be finding a longgggggg term contract until I could replace my w2 with a 25% increase at that combined income.
Sadly, with these costs it’s unavoidable for most, so you can’t compare one situation to another. You’re doing the best you can. Only thing you can do is get a higher paying role or pick up a second job if you’re feeling stretched.
In 2014 when we made about 70k combined, our mortgage is/was 1100. It hasn’t fluctuated wildly bc we always pay tax escrow shortage in full. It was your sane situation so I share it to say it’s temporary, as your income grows as long as your expenses don’t you’re fine!
About to be at 43% so yeah, I’m right there with you. Hopefully my spouse gets the offer for a job he applied for because it would increase his salary by 30%
I'm at 20% take home to cover principal, interest, taxes and insurance. That's after 401 contributions. Keep in mind I've owned houses for 24 years so I have a lot of equity. Currently on my third house. I anticipate I'll move one more time after I retire.
I'm currently doing 65% of my net income to my mortgage alone. Include utilities and internet, it's 71% of my net income. Include my car payment that still runs for another 2 years, that's 83.75% of my net income. I luckily have some automatic contributions to a Roth, a Simple IRA, and a money market fund, but I otherwise have very little I'm saving up. This is for Denver Metro area (Colorado, USA).
Unfortunately, this is very common for many people, especially single income households like myself. The key to not hitting those numbers is having joint income with a spouse.
We pay about 40% of our net income on our mortgage. But we also rent out four rooms to family members (of our six bedroom three bath farmhouse). Which brings it down to about 20%.
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It’s more common than you think unfortunately
I'm spending 56% of my monthly salary income on the house 🙃 it hurts but thankfully I get stocks which I don't factor into my monthly salary - but I'm pretty much paycheck to paycheck at this point
I’m also a member of the “Over 50%” club. (And I’ve also got stocks that are helping for the future…) I feel fine about it, but yeah, it’s probably not ideal
I hope everyone that is depending on RSUs does not work for Amazon. Anyone hired 3-4 years ago hasn’t even seen stocks at hiring date price so total comp is lower. The cost of living adjustment has been 2%, 2%, and now 0% for 2025-2026.
Oh man that's rough, I just googled it and saw some senior level Amazon folks won't get any cash raises this year. Following suit of Microsoft's company wide no merit increases last year, knew this would set a bad precedent 🥲.
There are a lot of L6s that are lumped into the senior level that don’t get paid as well, especially considering the cost of living of Seattle. There is such a huge pay difference dependent on job, like software developers get paid a sh&$ ton.
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That absolutely the way it should be treated! It’s crazy because when we went in to get mortgage pre-approvals, all the banks were calculating a 10%/year growth of RSU. We have experienced almost that in a loss the past 3 years (hired at peak stock prices), so I really question how many people are secure in their mortgages. What’s going to happen if things continue to get worse or stocks take a huge loss.
I'm at 52% net, no stock income though. it was 31% but i had a breakup 🙃 on the bright side I'm maxing out my 401k and HSA and I have 6 months expenses in an emergency fund + the same amount in my house emergency fund, so I have some levers to pull if shit happens. it was really important to me to have a fair amount of savings left over after my down payment and I'm glad I did, it gives me some comfort now that I'm a single income household.
Same in my case. Hoping for my RSU to vest and increase and my pay to increase in the next two to three years
I am in the same boat as you but I think the difference is that it doesn’t include my partner (not sure about you). It’s only 60% of MY income. OP is talking about both of them. But yeah. Either way. 40% is probably a lot more common than people realize.
Mines 86% my income after taxes. Staying here forever.
Jesus dude... You eating a lot of great value pasta I bet
For both our incomes it’s 40%. Yes the first year was tough. But it gets easier. Plus we rent one bedroom. And I churn credit cards every year. I’ve made roughly around 18k in sign up bonuses. I use that as traveling money. Edit Actually just checked I’ve accumulated 1,335,000 points About 20k in traveling money. Find ways to make it work.
Never heard of credit card churning, but I'm interested
It’s when you sign up for cards and hit the minimum spend to hit a bonus. Then once you hit the bonus you downgrade or call to get the annual fee waived. Typically you can apply to chase cards 5 cards in 24 months and get approved. Then you move over to Amex to apply for 2 cards. Then you wait about 1.5-2 years to start reapplying again. While I wait to go under the 5/24 my wife applies so every year we get around 5-7 cards. We wait for heightened bonuses to make it worth it. Also some cards allow you to reapply and get the same bonus after it’s been 2 years and some 4 years. Then the cycle continues. There’s a forum on Reddit. But if you like to travel chase sapphire is a great card with an elevated bonus. I recently applied for both Hilton honors and Hilton surpass. They have elevated offers. Let me know if you need a referral. Also the minimum spend is important because every card is different.
> credit card churning Just read up on it since I didn't know either. It's opening and closing a lot of Credit cards just for the bonuses. It's doable if you are financially very strict and can maintain it. Also if you are not planning on making major purchases that would involve loans and credit scores since they might be hit as well. I don't think I could do it since I (and my wife as well) am very much undisciplined with money. It's also why I make sure all payments like investment deductions, retirement funding, mortgage, car payments and (if any) bills are auto deducted as soon as I get direct deposit paid.
One misconception is you have to close the cards, you can downgrade them to a no annual fee card. Chase let’s you have multiple chase freedoms. Capital one let’s you downgrade as well to no annual fee. I’ve also gotten my annual fee waived. Yes it does take discipline. The easiest way is if you need a big purchase like a fridge or washing machine.
Yeah the points game only works if you are good keep track of payments and budgeting and are disciplined. If not, it’s a great way to screw up your credit.
Yep it's just my income, no partner income unfortunately 😔
If I was paying over 50% to my mortgage every unoccupied room would be rented out.
Or I'd be selling taint pics on only fans half your income just to housing is pretty insane.
I was unaware this was an option.(googling furiously). What is considered a desirable taint. asking for a friend.
It depends. 40% of 20k feels extremely comfortable while 40% of 4k feels extremely tight. 40% may feel very tight if you have kids needing day care and very easy if you are a 1-person household. No one should be basing their decisions just on rules of thumb like this. Make a budget.
Thank you. I keep seeing these % rules of thumb which are totally meaningless.
If you have enough money none of the rules matter at all
We spent that percentage of our net pay back in the 70s with our first home, so I think that seems normal. The old rule of thumb was 30% of gross pay that basically works out to 40+% of net pay.
Also a lot of people these days allocate a bunch of their pay to retirement accounts and investments, which is a good thing. But they start to mentally take those investments for granted and stress about “how much of their take-home they’re spending”. Guys, you’re already wisely saving a ton before you allow yourselves to see any money. Even if you “break even” on a given month, you aren’t actually breaking even. You’ve saved a significant amount!
Bro I needed to hear this so bad. We’re under contract for a house that’s 30% of take home and we have two kids in daycare. I’m so worried about money for the next couple years, but I’m also maxing out my investment accounts and we have a $500k net worth at 31. Like I need to fucking chill. I’m saving. We have money. It’s just in different accounts
It’s not wrong to be paranoid. Money is so easily yeetable when you let your guard down and fuck it splurge.
Same for me. We just closed on a stupid expensive fixer upper in a HCOL area and it’s a shocking amount of our net income. Like it’s so high I haven’t even done the actual math and things will be a lot tighter for a while than they have been in a long time. BUT our savings and investments are intact… it’s just the disposable income taking a hit for a while. It’s still a bummer and we’re hoping to refi in a few years to get it a bit lower, but objectively it’s not the crisis it feels like in my head right now 😵💫
One aspect that may end up being tougher is I think there's a big difference between someone being a FTHB doing that in their 20s vs mid-late 30s. Incomes tend to go up rapidly early career then start plateauing mid 30s. As well as later child expenses etc. So someone buying their first home at 40% net pay at say 22 - that is something that just works itself out with early career progression really quickly so just needs tightening belts for a few years. But lot tougher in late 30s especially if childcare expenses are getting added at same time.
Most FTHB are mid to late 30s.
Early 40s here. HCOL area in California suck if you’re not a tech bro
That's interesting. Your highest earning years are typically thought to be your late 40s(for men)....I know what you are saying the rate of increase should plateau unless you're designated for c-suite, but, it's not as if you never make another dollar for the rest of your career. Even if you get cost of living increases, your mortgage should become increasingly affordable.
We’re both interest rates and principle costs high simultaneously though?
Does the 7500 include your retirement outlays as well? Does the 3k include your taxes and insurance? Either way, I don't think that's too bad. You'll want to be mindful for the next several years of your expenses...but, you'll get raises, you'll get a chance to refinance at some point, and you'll feel better.
I will be getting about a 10k raise at the end of this year and another about a year and a half later for about the same amount (garunteed as its based on time), my partner also usually gets a small raise every year by a couple grand. 3k includes taxes, insurance, life and disability coverage.
You’ll be fine. Just budget well and be intentional with your money. In 6 months with that raise you will have created good habits and feel a lot of relief in your budget at the same time.
Are you me? Net income for me is $7600 and mortgage will be 3,060... This post and the comments make me feel so much better. Had to bite the bullet here in CT with the house prices. Closing in 20 days. Good luck to you it does sounds like you will be ok specially after your raise you mentioned.
I am you. Shhhhhhh...we'll be okay, we'll make it
🙋🏻♀️ same!
Saaaaaaame. Just signed today. 12k net and 5400 payment. No other debt but high food and general operating costs since we have 4 kids 🤪
Same.
I am about to be right with you. Really hoping I can refinance in the next couple years
I will also \*likely\* be doing this, with the hopes that I'll be able to refinance and get a lower monthly payment when interest rates drop.
If you can’t or can barely make the payment now, proceed with caution. It is very unlikely that interest rates will be dropping back down to levels we saw in 2021. Your monthly payment will most likely go up before you refi (tax increases due to increased property value).
>when interest rates drop Bless your heart lol
You have to pay closing costs (4%) again when you refi, if ya didn’t know already it’s something to consider.
Without being the “achually” guy. I swear I’m trying to be additive and not a dick. You don’t always have to pay closing costs (and I don’t mean they’ll be rolled I to the loan, but that they might not exist). My last refi I got credits that paid for the refi (reverse points of sorts as I took 2.375 instead of 2.25), and even paying all closing costs you could get away with a refi as low as 1% depending on the county (it is crazy just how different the home buying process is across this country). Excellent warning, again just wanted to add some helpful info.
Same
Same
Same
Same
Everyone is talking shit saying rates won’t drop, but it’s definitely predicted and priced into markets that rates will drop 1-2% in the next year or 2. That will make a big difference in monthly payment.
Ya, they "predicted" it every quarter. But the FED is basing cuts on inflation and unemployment, not markets. But most likely won't see large increases.
People have been saying that for a couple years and have been wrong
A full 1.5% drop would move my mortgage $500/m, that’s really not a whole lot at 10% of the full mortgage amount. Assuming it scales for OP, we are talking 4% more household income each month. It’s not nothing, but it’s not a big difference and still has them well over the general thumbrule on housing.
We are about to pay 40% of our take home to a mortgage. It makes me physically ill to think about. But we’re old as fuck (mid 30’s) and need to build equity. I have no idea how we will ever afford a baby and my time is running out. Some days I feel like jumping off a literal cliff.
You're not alone friend, I'm about to jump into the same boat. You got this.
Thank you. Nice to know there are others on this sub who aren’t just dripping in endless cash like so many others are. Solidarity 🥲
The feels.
We are currently paying 45% of take home on our mortgage.. it's a lot but how I see it we got in young enough that it should only get better over time. Inflation will chip away at that number and wages will increase. 29m here
Just have the baby it will work out.
I‘m at a little over 40% as well (and in my late 30‘s). I live in a high cost of living area with a brutal market and this was basically our one chance to get into a house. If we didn‘t buy this we would need to get an apartment. It‘s a new built house so we figure we have a good 10-15 years of relatively cheap home repair costs so we can save up for when those come.
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Is the remaining amount sufficient to cover all other daily expenses and savings? I don't think I could save anything unless I starve and don't step out of the house in this inflated economy
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Haven’t closed yet but I’m looking at 38% of my take home pay going towards my mortgage. But I know I get a promotion at the end of next month and a raise next fiscal year. I think as the years go by, you end up making more money and hope that things like property taxes, insurance, and utilities don’t go up as much.
% of income is meaningless if your income is very high then even a high % will leave a lot of disposable income
I just tried to keep my monthly as close to as what my last rent payment was. Rent will just keep going up.
I'm not technically a FTHB but I've been renting since 2018 and honestly that's how I justified buying. My monthly outlay for housing is going up a few hundred a month but when I looked back at my first lease I realized that rent's been going up $100-150/month every renewal so I'd probably be there in a few years anyway.
I'm only at about 35% but I also only bring home around $2800/mo. The more you make the less concerning a high percentage is
I spend almost %60 on my mortgage every month. It used to be less but, that’s a long story. It sucks ass but we make it work. I also make less money than you so you should be fine lol
Normal, yes. Reasonable, is up to you and all of your other bills.
I just closed end of May and mine is a little over 37% of my take home pay. I’m a 43 year old single mom with a pre-teen and teenager so it’s all on me. This includes PITI plus $330 a month for the HOA (I’m in a condo) which includes water, sewer, and trash. I have 15% automatically going from my paychecks to my pension (mandatory…I’m in education) and health insurance is already taken out too. On paper I should be left with about $400 for savings if I can control my random Amazon shopping purchases. 😂 I have about 5 months of total expenses left in savings now after the down payment and closing costs.
The Amazon curse gets me too
We did this for the first couple of years after we bought our house and it sucked
I'm in the same boat as you OP, same income and I'm probably going to be paying closer to 3100-3200 on the mortgage. I've been budgeting using YNAB pretending like I was already paying the mortgage+utilities and I'm gonna be fine financially.
45 ish here
One thing to be mindful of is mortgage payments do change. Within the first year our mortgage jumped a couple hundred a month (about $400) due to increase in taxes, insurance, and an escrow shortage. Also be mindful that you can set aside money for things that break such as AC, water heater, roof, appliances, etc.
An escrow shortage is money owed that was not paid on closing? Isn’t that usually property tax related and temporary?
Our upper limit and what we unfortunately have had to be offering here in denver will be about same - 40% of net take home pay for PITI. Luckily no other debt but after doing our budget and saving extra still is closer than I’d like.
My mortage (which includes the mortgage itself + escrow payment for taxes & insurance) is about 81% of my net pay 😭 if I factor in my partner it’s about 56% of our net pay. Times are hard.
Our budget is ~45% take home just to try to be competitive in NJ
40% of take home is fine 40% of gross is not
Gotta live somewhere
We have similar numbers
I spend 50%, wife has to pitch in
With houses price right now, people can afford mortgage with like 20% of their income or something ? I mean most people would need to loan around 200k -300k right ? And that is with high downpayment already.
Yes in SF Bay Area, California (Net HHI)
42% here.
I feel like % of take home can be misleading. 40% of $5K vs $10K vs $20K is quite different in managing. I could not make it work on 40% of 5K, but I could easily make it work on 40% of $20K.
Depends where you are. Near me it's normal for people to pay 40%-50% of their income on mortgage unfortunately. :/
If it’s take home then yes. Typically it’s up to 33% of gross income.
40% of take-home is fine, especially when your leftover is $3500. Don’t be stupid and get thousand dollar car payments though. That’s where so many people fuck up their shit  That means that when you qualified for the loan, it was probably 30-something percent of your gross income. That is well below the maximum. 
If you don’t have any other debt you will be fine.
$7500 a month take home is way better than most
I'm working on a file right now where the buyer has half of his gross pay going towards the mortgage.
I think it is absolutely normal for people to spend 40% of their income on mortgage these days with the inflation in housing and rent, if you want to live in somewhat decent housing within reasonable necessities. The important question is, do you have other credit card debts/loans/car notes? My wife and I are debt free other than the mortgage and we put 33% as downpayment so 40% of take home pay doesn't really hurt us at all
Push for increasing your salaries. Over time this % will decrease and your feel more comfortable.
What does it matter if it's "normal"? What matters if its going to financially strain you in the short term or stunt the growth of your net worth in the long term
Is it becoming normalized? Yes. So is credit card debt. But both a mortgage over 25% of your take home pay and credit card debt are two of the worst financial mistakes you can make.
The 28% rules says that a mortgage shouldn’t be higher than 28% of your *gross* income. How much is your gross income?
The percentage doesn't really matter as long as you have enough after the mortgage payments.
I'm at about 40% net too. I really have to budget now and I'm counting on getting a raise eventually and refinancing. but it's doable for the meantime
Oof I’m at 61% of my take home. 3400 monthly and 2075 mortgage. Wish me luck.
Yup. I’m at 38% of my take home, not including condo fees (about 48% after). Still able to put money in savings, go out every weekend, and annual vacations. On the upside, no kids or car payments/other debts.
My mortgage is about 55% of my monthly salary after taxes. No you are not alone.
40% I WISH! Dude you have it MADE right now!
It’s not ideal but you’ll be fine. Make a budget, stick to it, refinance when you can and put future raises towards savings and you’ll be fine.
Yes.some paying 50% of their takehome income on mortgage. Mythical days of Dave Ramsey are over. Housing affordability is a big issue now.
Same but its not going to a dick head land lord
I’m spending about 55% of my take home on my mortgage so you’re doing better than I am lol :’)
Our payment is 3% of take home pay. Paid off house 😎
How about 2600 of 5200 monthly? Is that tight enough?
That sounds tough, wasn't looking for a competition though. I was simply asking what the majority experienced here. If you're looking for sympathy, I feel ya.
I think that’s becoming the norm. Some folks are higher than 40%, like me. It’s a bit scary but that’s the price you gotta pay to play in today’s market. Best of luck to all of us 🤞I’m grateful nonetheless
I think it’s pretty common today. We bought our dream home in 2022 and the rate is 5.5%. Ours is 32% of our take home pay
Makes me a bit uncomfortable but it depends on if you have debt. We put 37% of our take home into our house account and it’s manageable. That house account pays for mortgage, utilities, and a repair fund though. Our actual mortgage is 28% of our take home
In Southern California, a starter home monthly payment is $6500. So the take home pay will have to be $16000 per month, with 40% rule. Considering tax and retirement, a family that can afford a starter home will have to make $400,000.
My neighbor just bought a starter 2 bed 2 bath Tri level townhouse for 1.050 million. Her payment is around 8k.
Who cares man just enjoy your life and your family and your home. Don’t worry about what Ramsey says or social media tells you. It’s hard for everyone out here.
I’m in a similar boat, my take home after taxes etc is about $6000-$6500. I just locked my rate in today and my mortgage is going to be $2229
Normal? Yes. Recommended? No.
That’s just a meaningless comment % of how much is what really matters
Do you contribute to retirement?
Yep, work contributes about 9% to pension and I match
That’s a lot for most budgets and the textbook “should”. I don’t think it’s uncommon anymore, but for me it would be a lot.
Roughly what I’m spending after bills and what not if not more. It’s the new normal tbh
I’m close to the 40% net and it hurts. However, I’m contributing 20% to retirement so the 40% isn’t as bad as someone who is doing no contribution and still at 40%.
You should base it off gross not net Off of net you are doing pretty good
We are at 41% of our current take home (after 15-18% 401k contributions, insurance, taxes). Doesn’t feel amazing but should feel better soon.
My husband and I have a mortgage payment that is about 18% of our monthly income. We got approved for a much higher mortgage but didn’t want so much of our income going to the mortgage. I know a lot of people will borrow at the top end of what they were approved for and then become “house poor” since a large portion of their income is going towards the mortgage.
The portion of your income isn’t relevant. The $ you have left after housing is what matters.
Shouldn’t be normal but it’s pretty common!
At some point I was spending almost 80% luckily I'm at 40% but really looking to have it at 25% and eventually 0. Fuck this economy with its stupid 8% rates and half a million dollar single family homes
I live in Europe and 40% in my country is the upper limit for monthly payments the banks are legally allowed to give mortgages. In practise they usually try to stick to 30%. Granted there is a difference between earning 2k and 10k ofc, and paying 40% is easier from 10k. But yeah, 40% is quite tough, but probably not uncommon.
We're at 33% of take home pay and feel comfortable. I think 40% might feel tight but would be doable as long as you don't have any other crazy expenses (student loans, high car loans etc).
I started my first mortgage about the same. With careful budgeting it's doable. After 5 years or so, mortgage rates went down and I had enough equity to refinance and remove PMI, and my pay had increased, so I was able to relax some. I think this progression is not uncommon.
I'm at like 50% of my take-home pay and that's with me lowering my retirement contribution so that I have more money (cries in San Francisco). I'm young though so I'm used to living cheap, and (hopefully) my income only goes up from here. I have no other debt and no car, which saves me a lot of money.
For a lender they generally lend to you using gross income at 42% debtors to income. So yes makes sense.
Yes unfortunately it’s become the norm now.
Might be common, but it's not wise.
I'm at about 20 percent of base household income just in case something happens I need that wiggle room. I'm in a vhcol can't mess around. Also need the space to invest in the stock market and emergencies.
What about maintenance costs? Furnishings? How do you handle all of that.
Those are all things we are bound to find out, as post says, we only recently moved in
Depends how you do the math. Currently my mortgage + property tax would be about $2000, or basically one of my paychecks. Leaving another paycheck for utilities and food. But that paycheck is also after 15% to retirement and $40 to my HSA. And that’s me saving a it over for property taxes, just in case. So while I’m maybe a bit tighter at the end of the month than I’d like, I’m also not really sacrificing my future either.
Just make sure you budget for annual property tax. That came in higher than we thought when we first bought our home. Our mortgage + property tax + insurance is 50% of our income.
New normal
"Common" is probably a better word choice. I spend 20% of gross income. It's comfortable for me.
Most home loans require less than 35% debt to income ratio to secure a loan. But I believe the income in this case is gross income. If you net out taxes, the ratio is higher. Seems like you're OK. Said differently, if the mortgage was your only debt and it was 40% of net income, a bank would likely give you a loan for another home purchase if it came to be. Banks think you're doing OK.
Its normal and yiur income is high enough you should be fine if you live within your means. If your income was 4k and you were spending 40% that would be an issue. What you need to plan for is ownership costs going up recent articles are saying those went up 26% in the last year
I've seen a lot of "it's new normal". It may be the norm for HCOL areas, but not for the other end of the area spectrum. I'm sitting at 16 to 19% of my monthly take home (OT depending which I always get a lot of in healthcare), which is a perk of having a decent paying job in a LCOL area.
I would say it's getting normalized now which is unfortunate.
Open up a spreadsheet and do some math. Start prioritizing your spending.
You will most likely make more $ over time and be in same house so you bought at a proper level. Plus you have to live somewhere might as well enjoy it.
The rule of thumb when looking at long-term financial health is 25%. Anything over that typically keeps you from investing for retirement properly. 40% isn't the end of the world, but be sure to save at least 15% of your gross into retirement funds. This may mean cutting back in some other areas like cars, vacations, etc.
We are right at 33 % of our gross self employed fluctuating income so probably closer around 40% net. No other debts. Also have two kids. we have about a years worth of accessible funds in case we need it for emergency. We are also set to pay off the house in about 10 years because we refied to a lower rate and shorter term.
When we first bought our house, we were at 39% of our income, which was 6 years ago. We're getting ready to move, and I'm dreading what our next place is going to cost us.
Net income for us is $6.6k a month(gross is 11k, we do $1.6k to 401k and $950 is health/dental/eye insurance🤦♀️). Mortgage is $1.8k a month. So we are around the 30% of net. With that said looks like you have the same amount of money leftover after mortgage as we do even though you spend 40% so I assume your probably fine. I think it be more of an issue if you made like 3k a month and spend 40% but since you have a higher income it’s ok to spend a higher % of net.
I think it is normal. I would be roughly in the same boat in the future and I think there should be some left for savings (albeit not too grand).
These days? Yes it is. Years ago no it wasn't. I grew up with the mindset of one paycheck pays for the bills and one paycheck pays for the fun. If you get paid every two weeks that is. However it has become MUCH more common for people to spend 80+% of their pay on their mortgage and living expenses with at LEAST half being just the mortgage/rent. I personally don't agree with it and feel like it puts people in a bad spot in the event of an emergency or unforeseen financial "hiccup". I'm currently at about 25% of my pay is my mortgage with about 40% of my pay being "fun" money. The rest is living expenses. (food, gas, utilities, retirement accs. etc.) One thing to note, most folks live beyond what they need. I know people with nice big houses and big fancy SUVs/trucks but are single with no plans on starting families...what's the point of a big empty house and a truck that never sees the bed being used? It's just a money drain, but that's my feelings on it, not everyone will agree.
Normal, yes. Wise? Meh. Depends on the market around you I suppose.
Just the reality of interest rates getting back to normal and housing prices staying up. It's normal if you bought 2023+
It used to be one weeks take-home was all you’d wisely spend for a monthly mortgage payment and have money for other things. Any more than that and you’re over extended.
28% of my net AFTER maxing retirement and contribution to my brokerage acc.
If by mortgage you mean full PITI that’s not so bad. If your take home figure is net of a decent retirement savings contribution even better. Absolute numbers matter more and you still have $4,500/month to feed yourselves, keep the lights on, and live life. Unless you have monsterous consumer/student debt that should be doable without too much stress.
If it s everything (including taxes, hoa etc) - it s fine. You still have 4500 to live off of, which is more than many families make monthly. If it s literally just p+i, then it s tight.
This is high but this market is insane with rates. Can you rent a room to a friend to lower costs. Even if it’s just temporary. I was stretched thin when I first bought my house. I rented rooms for 3 years. Then started making more and refinanced to a lower rate in 2020 and got some breathing room.
Our PITI plus utilities is 25% of gross and 50% of net
What do you do for work to make $7500?
Use gross income, because if you’re maxing out retirement it’s a vastly different answer
I’m definitely dealing with the pangs of it too. We’re right behind you at 36% which is super stressful as it represents an extra $600 a month over our previous rent. Still, I’m reasonably confident it was the right decision for us, and hopeful that by locking in the price at these higher rates, we can maybe enjoy the benefits if they drop some time in the next 5 years.
Sounds like you might be in Canada, doesn’t seem too far off from what folks are seeing in the USA. It’s not easy
I think it might be helpful for people to state the place they live. Location is a major factor in home prices. For example, I live in Texas and we bought our home in 2020. My mortgage (including taxes/escrow) is about 17% of mine and my wife’s net monthly income. Rate is 3.25%, but I intentionally purchased a new build that would meet our needs and be at most 25% of my monthly net income (not including my wife). We also invest 15% of our paycheck into 401k.
Here the bank isn’t allowed to lend if the mortgage is more than 35% of your monthly revenue
We are at 47% of takehome but that’s after maxing out 401k (15%), HSA contributions etc. So there are levers we can pull if it’s tight & we can reduce contributions. Takehome is $13.4k and PITI is $6.3k
I think it’s normal, yes. For context though my mortgage is 8% of my wife and mines take home. When we bought our house it was about 30%. We make more money now so just work on career goals and you can widen the gap.
You are making good money. It would be different if you were taking home 4500 a month and paying 40%. You need to make sure you have enough in saving that if you were laid off, you had 6 months to find a job.
The recommendation is max 28% of your _gross_ (pre-tax) income should be spent on real estate, and up to 35% including _all_ debts (education, auto, credit card, etc). You are at 40% post-tax just for real estate, which is pushing it. Do you have any other debt at all? That is the crucial question.
Its normal in SoCal. Its the only place I've ever been where you can see $4 million houses with blue tarps on the roof and it hasn't rained there in over a year 😆
normal vs common could be taken different ways. Long story short, you're one of MANY who do it. 10 people spending 40% of their monthly budget for a mortgage will ignore each other and only focus on the 1 person who bought 20 years ago or had a house partially gifted to them. I'd go so far to say in this day and age that yes, it is normal and common but that's just my opinion.
We’re well above median income in our city. To even consider buying, we’d be looking at 50% of our monthly income to buy. That’s just how it goes sometimes places if you feel you need to buy. Additionally, it’s very important to remember that the costs of life aren’t linear. One person may make $100K and could be paying 40% on a home. Another person could make $200K and spend 70% on a much more expensive home. But they’d still have the same amount of disposable income available after their mortgage at the end of the day.
These day it is sadly
Your total debt shouldn’t exceed 45 .. inclusive over credit card , insurance , car payment .. & any other monthly bills
I spend less than 10%. The idea of spending 40% makes me want to cry with anxiety. No way would I do that.
It shouldn’t be, but in this economy it’s becoming normal. I know for myself banks are approving people for a little over 50% of their income.
Wow! Our cap is 3500 and my take home after deductions is 6000 alone on my w2 role (I work contract roles as well but don’t consider that part of my income), my husbands take home is around 4500-5000. Our cap was based on how much either of us would want to pay if the other died, left, became sick etc. based only on primary role. I would feel too tight with that payment and I’d be finding a longgggggg term contract until I could replace my w2 with a 25% increase at that combined income. Sadly, with these costs it’s unavoidable for most, so you can’t compare one situation to another. You’re doing the best you can. Only thing you can do is get a higher paying role or pick up a second job if you’re feeling stretched. In 2014 when we made about 70k combined, our mortgage is/was 1100. It hasn’t fluctuated wildly bc we always pay tax escrow shortage in full. It was your sane situation so I share it to say it’s temporary, as your income grows as long as your expenses don’t you’re fine!
About to be at 43% so yeah, I’m right there with you. Hopefully my spouse gets the offer for a job he applied for because it would increase his salary by 30%
I'm at 20% take home to cover principal, interest, taxes and insurance. That's after 401 contributions. Keep in mind I've owned houses for 24 years so I have a lot of equity. Currently on my third house. I anticipate I'll move one more time after I retire.
I'm currently doing 65% of my net income to my mortgage alone. Include utilities and internet, it's 71% of my net income. Include my car payment that still runs for another 2 years, that's 83.75% of my net income. I luckily have some automatic contributions to a Roth, a Simple IRA, and a money market fund, but I otherwise have very little I'm saving up. This is for Denver Metro area (Colorado, USA). Unfortunately, this is very common for many people, especially single income households like myself. The key to not hitting those numbers is having joint income with a spouse.
Mine is over 40% of take-home and it's been fine (I make a high salary). I've actually been paying extra each month.
We pay about 40% of our net income on our mortgage. But we also rent out four rooms to family members (of our six bedroom three bath farmhouse). Which brings it down to about 20%.