Percentage of Income to rent/mortgage?
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| Wed, 09-10-2008 - 10:11am |
I think 30% is the maximum you are supposed to spend on rent or mortgage (??)
My questions are:
1. is that based on gross or net income?
2. are your utilities like heat, light, phone, supposed to be part of that percentage, or added on top?
I am working on call so my income fluctuates, with no guaranteed minimum amount. I have just had to find a new place to move (I move Oct. 1) and I thought I could afford up to $x amount per month in rent alone, until I thought about it as an annual amount in relation to my projected annual income. I could have paid the rent at the amount I had figured on, but I got really concerned I might not be able to afford other basics and wind up counting on credit cards again. In other words, I can't really afford that much rent even if I could actually pay it.
The scary thing is that there is almost nothing available for *less* than the amount that I can't really afford...renting as a single person without a big income is scary. Anyway, I've found a shared rental situation with all utilities included for the same amount of rent I pay now, so I should manage to stay out of debt. Just wondering what the guidelines are.

I think it also partially depends where you are living. My home expenses are high. With taxes and insurance my home is 30% of my gross income (or approx. 40% of my two week net --> I get paid
Bex -
Bex, how on earth do you get $28 a month car insurance? I just paid $1072 for a year of insurance...but then I have upped the Third Party legal liability to $3 million, and I have collision and comprehensive too. I'd still be paying $50-$60 a month without the extras though.
I live in BC, just outside of Vancouver. It's expensive, more so than Ontario as far as I know (food is a lot more expensive here)...but the housing market is really starting to tank here. I am hoping that means a lot more will become available over the next year.
Sorry that should say $82 a month, lol!!! Apparently I can't type this morning. I am in the same boat, in that I have maxed out the insurance ( I would rather pay the extra $10 a month then have to worry about arrears on my pay forever if god-forbid i ever caused an accident and had a huge judgement).
You are correct though. My friend moved from Ontario to Vancouver and almost had a STROKE at the cost of things. Food, gas and housing were the big ones! I hope for your sake housing comes down because its so inflated that it would take forever to save a downpayment for a convential mortgage!
I live in Ottawa so the market is stable. We don't really get the big increases like other places, but we don't really see the big declines either :)
Bex -
"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."
Bex -
The experts are saying now don't put a lot of extra into housepayment until the real estate market settles down a little It
Hi Mary Ann,
I should have been more clear, I'm only adding to the mortgage once the debt is gone (fingers crossed about 5 more months!!! Yay!) We don't have 401k in Canada. Our version are RRSP's, but I am not eligible
Bex -
Sorry Bex
Never know really where people live because no one fills out their information much. I used to look at the information to see where people lived but I have stopped doing it because 95% of the people's are blank.
Like I said I am sorry
Mary Ann
Lol don't you dare apologize woman!!! I appreciate any advice I get (especially when it comes from the heart and has my best interest in mind!!!)
Never apologize for trying to help someone out!!!!
(((HUGS)))
Bex -
"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."
Bex -