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LSUKTR
LSU Fan
Baton Rouge
Member since Nov 2005
1372 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
My personal rule for our first 3 houses was home value 2x income. I guess mortgage value may be a better way to measure.

eta: we are dual income, so also have to run a sensitivity against single income in case my wife changed career or chose to stay home. That ultimately makes us have to be more conservative.
This post was edited on 2/23 at 3:25 pm


notsince98
Missouri Fan
KC, MO
Member since Oct 2012
14012 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
ratio or percentage doesn't matter. All that matters is how much money do you have left to spend after the mortgage and all the other monthly bills? Is that amount enough to have fun with and live a happy life? Is it enough to cover unexpected purchases?

Two people with the same salary might have different needs for a house budget. The person who stays home a lot, doesn't eat out, doesn't travel, doesn't spend $ on nice cars, etc. can afford a much nicer house than a person that wants to travel a lot, eat out a lot, buy nice clothes every month, etc.


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TomRollTideRitter
Alabama Fan
Member since Aug 2016
9769 posts
 Online 

re: What is the “normal” ratio of mortgage loan vs annual income?
quote:

My personal rule for our first 3 houses was home value 2x income.


How long ago are we talking here? You’d have to have an extremely high income for someone in their 20s or early 30s, presumably when most people buy their first house, to afford even a decent house at 2x income.

Props to you, but I don’t think it’s hardly possible to get in a good school district for that anymore.


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