POLL - How many times your salary or salaries do you (and your partner) borrow for your mortgage?

and what do u think is an acceptable multiple?POLL - How many times your salary or salaries do you (and your partner) borrow for your mortgage?
The first house we bought cost 1500 GBP in 1963. 100% mortgage over 25 years with local council.


Moved to second house 5 years later which cost 3250 GBP, 25 year mortgage for 3000. Each time it was 2 1/2 times my salary, plus an insurance to top up the rest.


We have moved 3 more times since then but didn't need big mortgages.


Now retired and live in Spain with no mortgage.POLL - How many times your salary or salaries do you (and your partner) borrow for your mortgage?
My mortgage is now about equal to my salary, when I took it out (10 years ago) it was equivalent to double.


I'm not filthy rich - I wouldn't be able to afford a garage for that amount of money now!
The rule of thumb is your mortgage payment and all of your debts payments added together should be less than 30% of gross. Anymore than this and you begin to see a severe restriction on your cash flow.





A quick calculation is in the U.S. we will pay approximately 1% each month for mortgage, insurance and taxes. This is not meant to be exact just a rule of thumb. For example, in Keller Texas, the median home price is around $270K. This means that the mortgage payment, insurance and taxes on a monthly basis would be around $2700.





This should be 30% of gross income. This means you should make, before taxes, and other deductions, around $9,000 per month or $108,000 annual. You might be able to reduce the intereste rate and move the monthly payment lower. You could also do a self funded escroll account like we do that will further reduce your expenses. I have a company funded Stock Purchase plan where I get a 15% discount on company stock twice a year. After taxes and fees, this works out to be around a 12% savings on my realestate taxes and insurance.





Good Luck!
The ratio of mortgage to income is more important, because interest rates can make a huge difference in how affordable a mortgage is. My mortgage to gross income ratio is about 33%, but I have a roommate so my portion of the payment is closer to 19%.





I could probably afford to pay the mortgage on my own, but it would make things a lot tighter financially.
A good ratio is that you should not borrow more than twice your annual income for your home. This assumes a good loan and interest rate. This is a simple and straightforward formula that is conducive to wealth building.





Hope this helps