How Much of Your Income Should Go Toward a Mortgage?

Posted By Bill kim | bk home broker

Buying a home is a big deal! But figuring out how much to spend can feel overwhelming.

Here’s a fresh, simple approach to keeping your mortgage affordable:

1. Set a Realistic Budget

Experts suggest spending 25-30% of your monthly income on your mortgage payments. This ensures you have enough left over for daily living costs, savings, and fun!

For example:

• If your monthly income after tax is $6,000, a comfortable mortgage would be around $1,500–$1,800.

2. Think About Your Overall Debts

Your total debts, including your mortgage, car loans, and credit cards, shouldn’t exceed 40% of your monthly income. Too much debt can make it hard to handle unexpected expenses.

3. Don’t Max Out Your Loan Approval

Just because the bank offers you a huge loan doesn’t mean you need to use it all. A smaller loan means less stress if interest rates rise or life throws you a curveball.

4. Plan for the Future

• Are you saving for holidays, kids’ education, or retirement? Factor these into your budget.

• Always have a financial buffer for unexpected costs like repairs or emergencies.

The Bottom Line

The key is balance. Spending wisely on your mortgage leaves room for the rest of your life. Take your time, do the numbers, and don’t be afraid to ask for advice from a financial planner or mortgage broker.

Owning a home is amazing—just make sure it’s a blessing, not a burden!

This content is for educational purposes only and not financial advice.