{ "media_type": "text", "post_content": "I'm looking to buy a house. What multiplier of (salary - annual debt servicing) should I use to determine my price range after down-payment? I see a lot of recommendations based on monthly payments and percentages of monthly gross income but I'm wondering if there's an easy rule of thumb related to annual income. Currently looking for 3x.", "post_id": "61abc38bb15593003350673c", "reply_count": 15, "vote_count": 2, "bowl_id": "552d1d24dc1c586b09d2d051", "bowl_name": "Consulting" }

I'm looking to buy a house. What multiplier of (salary - annual debt servicing) should I use to determine my price range after down-payment? I see a lot of recommendations based on monthly payments and percentages of monthly gross income but I'm wondering if there's an easy rule of thumb related to annual income. Currently looking for 3x.

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I’ve heard a conservative estimate of 2.5-3x your annual income as your mortgage. So if you make $200k, then you should be able afford a $500-600k house. Lots of assumptions here with current levels of debt.

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What if you make $200 and have $200 in student debt?

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It’s a classic “it depends” scenario. What is your current TC and do you have any major outstanding debts?

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Woops, replied below

I bought a $1.2m house on an interest-only loan and paid $2,500 a month

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Interest only mortgages were all the rage in 2008

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Work backwards - how much can you comfortably afford per month? Is it whatever you spend on rent now or more? Less if you have other financial goals you’re trying to meet. I’ve always found the calculations to overestimate what I want to pay for my housing vs other lifestyle choices.

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This makes sense. The only problem is it's more work 😂 I'll have to do this eventually. I'm not actively looking to buy, more just trying to learn the market and prices and what to expect. Targeting the end of 2022.

It has a lot to do with your DTI. Try to stay between 20-25%.

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Total or for just the mortgage?

170k salary, 1k/m car note, 600/m student loans. So including middle-of-the-pack bonus less the debt we could assume about 150-160k.

Yeah. I wonder how much the calculation changes if I rent out a room. I'm unmarried right now so single income, probably will remain so for at least 3 years.

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