How much of your income (%) does your ppor cost you a week?

G'day all, went house shopping today and we found the one, the dream home I never dreamt about but will be dreaming about tonight. Acerage, 2 man sheds that can hold up to 12 cars, heated slab flooring, recycled timber/brick/stone house and so much more. It's so cool and we want it bad, but it's over what we wanted to spend but I guess that's always the way.

This will cost us over 35% of our take home household working income combined, at 4% interest rates borrowed. All investment properties are positive cashflow but when/if interest rates rise over 5% then that will add additional costs I don't want.

May I ask what others are spending per week of their take home or what's the general rule of thumb that people spend on their home?
And what about when babies come along and down to one income?


Cheers for any feedback.

 

About 4%, but we are getting itch feet to renovate or move.

I think in the past was always around 30-35%

Lower the better, long term goals and all

 

Once upon a time it was ~30% & could have still been but we chose a different path..... it is now 0%.

We each need to way up how much being is worth trading for the having....only you can decide & hopefully your question elicits the responses you need to rationalize your eventual decision.

 

IO repayments are 25%. Would be about a third I think with P&I. Plus other costs associated with owning.

 

Our PPOR costs 4.2x our gross household income. We used a line of credit against an IP so our total repayments in comparison to our net income for our PPOR is 32.25% net income.

 

Thanks for the responses guys. Do you guys work the percentage out by the banks 7-8% or around the 4% P&I?

 

Approx. 20% of household income in current interest rate. Used to be 35% ish then due to lower salary and higher interest rate.

 

All non-deductible debt is around 18-20% IO on our combined income (only because I just substantially increased my income).

 

From my previous post I was using 4.19%, but I was also including the LOC as part of the repayment. By the time interest rates get back up to 7-8% I'm certain I would've paid off the LOC and would also be on a higher salary.

 

20% on my income only. Around 9% if my partners income was included, but the house is in my name only. We both prefer seperated properties.

What happens if you go to one income, what does the % go too, and could you maintain the repayments on one income.

The other thing to consider is payrises over time will decrease the amount of the %

 

I've always used actual loan rate & then added 2% coupled with reduction to one income to self evaluate what scenario would mean in terms of time until financial ruin.... that also helped me determine the cash buffer I needed to accumulate.

I'm glad to be rid of such worry but have made some lifestyle tradeoffs to be in such a position.

 

Good points.

If down to one wage then that takes us to around 61%. That's scary.
if wifey gets preganant I factored in no work or little work for 2 years, with cash in offset accounts to get us through.
If wifey goes back part time....at 41%, but I'm sure we can reduce 150k in a couple years smashing down the loan so percentage would drop, unless interest rates go back up then I'm stuffed.

 

I added 2% to make it 6. That makes it 52% which is not good with 2 full incomes. No way I'm paying that much as I could get into trouble and that would make life depressing, seeing more than half your wage going into a house.....but it's such a nice house

 

I'd be more interested in this as a poll, especially compared to the general population

 

Our ppor is a cheap town house, cheaper than all our ips so less than 5% of our income (on IO loan)

 

That's the way to do it

 

Percentages like this are only a very rough guide.

Someone in $300K a year clear could probably afford to go to 60% or even higher, whereas someone on $40K or $50K may struggle with 20%.
Marg

 

My interest for my new home is just under $30 a day... if I was still living in the old PPOR it would be zero.

But I love my new home... no regrets from me.

 

We are at about the 12% at our IO repayments. Looking to bring that in to zero over the next 5 to 7 years.

 

My PPoR is ~16% of my take home pay now, but it was ~27% before I changed employer in March and was ~39% about 5yrs ago when I was on an even lower wage.