HomehousingWhat's putting a roof over your head costing ya?

What’s putting a roof over your head costing ya?

As Girl Ninja and I inch closer towards starting the house hunting process, we’ve been contemplating how much house we think we can afford. We thought maybe a mortgage pre-qualification calculator could help us out. Here was what we got when we ran the numbers based on our current financial situation…

Is this real life?

A half a million dollar home would be considered a conservative purchase for us? A nearly $700,000 home would be aggressive, but not unreasonable?


I totally get why there was a housing bubble. People actually thought the amount of money they were approved for was the amount of money they should spend. What a crock! Heck, even if we eliminate Girl Ninja’s income from the equation (for when she becomes a stay at home mom) we still get a conservative purchase price of $421,000, and an aggressive list price of $500,000.

No. Freaking. Way.

When Girl Ninja and I figure out how much house we can afford, we actually don’t even think about house price. Instead, we have decided on a maximum monthly payment we’d be willing to stomach.We can then take that number and plug in some other variables (cash available for down payment, interest rate, and estimated property taxes/insurance) to see how much house we can buy.

We are personally comfortable with a monthly payment (including taxes) of about $1,500/month. That means, with today’s rates, we are looking at a maximum house price of about $350,000. That’s $200,000 less than the CONSERVATIVE calculation for our income. Can you believe that?

Seriously, who wants to put ALL of their take home pay in to a house… for thirty straight years? That sounds miserable and stressful. 

$1,500 is the exact rent we paid for our 600sqft, one bedroom apartment in San Diego two years ago. My/our income has gone up since that time and we know we can get by just fine with that size payment. Here’s how that number breaks down as a percentage of our pay…

1. 16% of OUR current GROSS pay; or  23% of MY current GROSS pay

2. 25% of OUR current NET income; or 33% of my NET income

So for now our budget is set at a $350,000 max purchase price. The only situations where we would possibly up the budget is if we a) bought a house near Green Lake in Seattle or b) bought something that had a rental unit attached. Living in Green Lake would be sweet, but as we learned during our open house-ing not even $400,000 goes very far there.

So reader, how much does the roof over your head cost each month? What does that work out to as a percentage of your  household pay? Be sure to put a general geographic area so we have some perspective. 



  1. We live in Madison, WI. My hubs and I make $150k together. We bought a $250k house about 6 years ago with a 30 year mortgage payment including taxes,etc of $1600 when our salary was about $100k. We’ve refinanced to a 15 year since then and our payments have remained the same due to the decreased interest rates. I’m Loving the 15 year mortgage and seeing equity increase rapidly now. Wish I would have done a 15 year from the beginning as we’d be almost halfway through it by now.

  2. Yup, those calculators are quite ridiculous. Unfortunately here in Australia, at least in the main two capital cities, a moderately new (20 years old say) 600sqft HOUSE (not a unit or a town house but a house) would easily set you back $500,000+… so you really have the choices of either leveraging yourselves up to your eyeballs or buying a 50 year old house roughly 25+ miles away and commuting daily.

    Even worse, this ludicrous amount is still considered “normal” for FIRST HOME BUYERS! We actually have a ‘grant’ system that gives free money to FHB’s…

    “…the grant will only be payable where the price of the property or construction of the home does not exceed $750,000”

    Imagine being a FHB with a $750,000 mortgage!!!

    It’s actually the main reason behind why I created, for everyone in Australia who now has a stupidly high mortgage and wants to learn how to deleverage as quickly as possible. To give you an idea of how stupid it is here, there’s even a dedicated Wiki page for it!

    Check out that Wages vs. House Price graph baby! Bam, pow, straight to the Moon!

    As for how much the roof over our head is costing us, it’s going to be $0 in a few years 🙂

  3. We’re in the Asheville, NC area. We pay $775 on a $125K home which will be paid off in about 15 years. This amounts to less than 20% of our family income. We’re a one-income family with some side projects. We were originally approved for a $200K loan when I was making $50K/year. We didn’t feel at all comfortable with that loan, so we bought much cheaper – something we appreciated when I was laid off a year later. 🙂

  4. $100/month into a savings account to cover our property taxes. We paid straight cash-homey for our house. Of course it helped that we purchased my grandmother’s old house from my dad and there were enough “comps” in foreclosure in the area to make the price realistic and not just as a family discount. This is in Indianapolis too, where we consistantly rank as one of the more affordable cities to purchase a home (average price for a really very good home is like $120K).

  5. 80/mo insurance
    158/mo taxes
    1289/ mo principal and interest
    200/mo extra principal payment

    This is a home in a major Eastern Seaboard city and after a multiple refinances.

    Agree on housing bubble. Our numbers are similar to you and I don’t think I will be venturing into those waters.

  6. ~$1400 house payment on 15 year loan which includes my yearly property tax, my HOA dues, and my homeowner’s insurance. How will you pay your property tax? insurance? planning on living in an HOA neighborhood? I don’t have the penalty insurance for < 20% down – are you able to get a VA loan, or are you planning on over 20% down so you don't have that extra insurance? Will you need flood insurance? 19% gross – 36%net, and only because I put a lot into savings and don't count that towards net pay. Also – no car payments, pay off credit cards each month – stay in budget – so, except for my house I have no debt.

  7. We live near but not in Madison, WI. My husband brings in just over $50,000 a year and our 30 year mortgage costs us $1250 a month including taxes and PMI. Not great as that is almost half of his take home pay, but it was already costing us that for a mediocre apartment for our family of 5, and where we are now is a much better school system for our autistic boys. We bought a very old home, a major fixer upper circa 1870, with a huge yard for our kids to run in and me to garden.

    We cut a lot to make our mortgage every month, but for us an apartment would not really be any cheaper and much harder on our kids.

  8. My husband and I pay just under $600.00 per month on our 3b 2b 2c 1500 sq ft home fit with mother-in-law suite in the back yard. Which is just under 9% of OUR annual income.That includes hazard insurance and property taxes. We refinanced in 2011 after throwing money at principle regularly since purchasing our home in 2008 (with the traditional 20% down). The original and refinance were both done at 15 years. We live in a suburb of Tulsa and housing is affordable and cost of living is much lower Seattle or San Diego. Mortgage calculators also showed that we could have purchased a house 2 X as much as we did! At 21 & 22 we realized we didn’t need a mansion!

  9. Our annual household income after taxes is right around $75K a year (that’s with hubby being in school – can’t wait until he is done and working full time!) Our mortage is $820 a month (that includes insurance and taxes) so that’s 13% of our take home pay. We could be more aggressive with our payments, but we know this is not a long-term house for us (I bought it when I started grad school 5 years ago.) Our plan is to build our long-term family home in another 3-5 years, then keep the house we are currently in as a rental.

  10. When I went to the bank to be pre-approved for a loan they told me I could get up to $220,000 from them. But after running the numbers backwards with what I’d be willing to pay out each month, my highest comfortable number was $170,000. So like you said, it’s no wonder that we had the whole housing bubble fiasco!

    I live about 20 miles north of washington DC and paid $170,000 for my 3bed/2bath condo townhouse. My rate is at 5% for 30 years. My payments (which include loan repayment, home owners insurance, PMI, and property tax) are ~$1,200 + ~$100 a month for HOA fees. I also pay an additional $50-100 each month towards the principal

    My pay fluctuates a lot based on how many hours I work in a week, but on my lowest paying months that payment is ~28% of my gross take home or ~50% of my net and on a good month it can be ~20% of my gross or ~38% of my net.

    I know a lot of PF gurus would be mad at me for those percentages, but I pay $300 less than a friend who lives less than a mile away and has a 1 bed/1 bath apartment. But I live in a pretty high cost of living area and I make sure I put a good portion of my take home into savings/retirement. I’m not happy with the payments, but I do OK each month, and I knew what I was taking on before I signed the paperwork. Boy am I glad I didn’t look at houses in the $220,000 range like the bank said I could. I would have been hurting pretty bad at this point!

  11. Monthly mortgage, condo fees, insurance, gas/hydro = approx. $2000/month (25 year amortization; about 1/3 of our take-home salaries). We’ve been in our new home 3 months, and absolutely love it! Approx. 1500 sq. ft, 3 bedrooms, 4 bath (1x4pc, 1x3pc, 2×1/2), move-in ready with a full finished basement (out of 15 townhomes we saw, only 3 had finished basement, and 1 partially finished). The home we bought is about $100K less than what we were pre-approved for; we refused to be house-poor and luckily, we’re not a “keeping up with the Jones’ kind of couple”.

  12. Wow!!! I cannot imagine buying a $600k house on the Ninja family salary, that is crazy! Not that I’m saying you all don’t make good money, but sheesh. You’re right, no wonder there was a housing bubble.

    My house payment (in Nebraska) is $1050, including T&I and monthly HOA dues. It is 12% of my gross pay and 21% of my net pay.

    I’ve been house poor in the past and it sucks. Never again.

  13. We rent a 600 sq foot cottage in NY (north of the city) for $900/mon (includes electric & cable)–great deal! This works out to a combined 15% of our combined take home pay. I’m itching for a bigger place, though… One with a kitchen more than two people can be in, a couple extra closets and a bedroom with a door!

  14. House cost $200,000 with 20% down April 2012
    (Built in 1987 3b/2.5b/2,960 sq. ft 1.4 acre land remodeled in Feb 2012)
    No PMI
    P+I = $760.00 per month
    Insurance (paid separately) $800 per year
    Property tax (paid separately) $1,850 a year
    HOA optional and we do not pay I think it is about $175 a year not sure
    P+I is less than 10% of our gross income
    We live in the great state of GA
    Note: in 2005 (height of the market) when I was single I was pre-approved for a loan of $300K to purchase a house. Every which way I turned my budget I could not afford home that cost $300K. So I bought $70K condo. Friends said I was stupid. Fast forward few years two of my “not so stupid” friends, approved for the same amount, have already foreclosed on their 250K-300K homes.

  15. Our rent is $895, which is 22% of net. We live in Durham, NC. We recently moved to a cheaper place and got a raise, so this is the lowest percentage-wise we’ve ever paid.

  16. I remember having the same realization about the housing crisis when my husband and I bought our first house…I was still in school so our gross household income was < $35k/year and they tried to tell us we could afford a $175k+ home – in what world??? Now we warn all of our house hunting friends to look at their budgets and what they can realistically afford rather than basing their range on what the bank pre-approves!

    We are in the St Louis, MO area, now with a gross household income of ~110k/year and have a $205k mortgage (30 yr, 3.875% interest, with less than 1 year of payments thus far, we refinanced this past spring). Our last mortgage payment was $1667 broken down as follows:
    $989 principal/interest
    $478 taxes/insurance (unfortunately our insurance rates jumped drastically last year after a few storm-related claims on our house)
    $200 additional principal

  17. Our 4 bedroom, 1330sf house payment (including taxes and insurance) is ~760 a month (I love TX) which is about 10% of our gross pay. Haha, that sounds ridiculous. We refinanced this year to a 15 year note and pay about 1000/month, which is about 14% of our gross pay. We’re on track to pay it off in 5 years (we really want to be debt free), then depending on how many kids we have/adopt, we’ll either use this one for a rent house and buy another one, or do some major updates on this one.

  18. Wow, are property taxes really that much cheaper in Seattle area than Chicago area? We pay just under 8k per year ($660ish/month) in property taxes, and our house is worth right around 300k.

    Our mortgage is $1465/mo
    Property taxes are $660/mo
    Insurance is $75/mo
    Total per month = $2200

    All of that added together is about 18.5% of our gross income, or 29% of our net income.

  19. $2200 for a mortgage each month? I can’t even imagine. When my husband and I lived in the UES of Manhattan, we paid $1700 for 450 square feet. When we moved to Boston, it was the same square footage for $1500. And now we’re still on the East Coast but living in suburbia and paying $1300 for 1600 square feet. When we do finally get a mortgage, we’re hoping to pay even less than that!

  20. Our mortgage is $1200
    Property tax is $400
    We bought the house for $400 k eight years ago.
    We are a family of 5 and I’m a stay at home mom. Honestly, with 3 school age kids, disposable income goes down significantly and so we bought for a price with the future in mind!

  21. Our payment is $1700/month which included insurance and taxes. As a percentage of our income that is about 8% of our Net income. Live in Texas.

    I never understood why they would let you get a house for 40% of your gross pay. I think I would hate my life if half our money went to our house payment.

  22. $1400 a month which is 31% of our net income. A little high for me, but we love the area we live in. I have a feeling that when we are ready to buy a home in San Diego, we will need to move way EAST, and way NORTH. So basically you can find us in the Desert.

  23. We are also looking to purchase a house in the next year. I have been trying to figure out how much we can afford. Our current rent is $876/month.
    Hopefully: We can get a house for $120k, put 20% down ($24K), and have a 15 year mortgage. If we can get a 3% fixed interest rate, our monthly payment will be $663 plus insurance ($75) plus taxes ($250)= $988.
    Ideally we want a 3 bedroom/ 2 bath home. It would be great if we could have a mother in law suite, but they are not very prevalent in Texas.
    However, we might have to pay a little more than $120K. The highest house price we will consider is $150k, but I will like to stay as close to $120k range.

  24. We currently live in a 1150 sqft home. 3br, 2ba; mortgage of 113k with a current balance of around 96k. Current payoff projected in late 2015. Our take home is just about 7k/mo. My wife purchased the house before we met in 2007 and had an interest only loan. This reset in April of this year and dropped to 3%. Our payment + tax = $450/mo. We’re adding about $600 extra in principle each month. So approx. 1/7 of our take home pay. Property taxes are roughly $300/year.
    Denham Springs, LA.

  25. I’m at the tail end of buying a house in Portland, so I don’t know my numbers precisely but it looks like I will be paying:

    Principle & Interest: 990.70
    Taxes & Insurance: 188
    for a total of 1178.70

    I’m also trying to guesstimate utility costs (including internet, cable, cell phone) and I think that may come in at $250/month, making my total outlay just under $1450/month, or 22% of gross or so.

    I paid 249 with 10% down and got a 3.375% rate (woo!).

    You said “So for now our budget is set at a $350,000 max purchase price” – is that before or after your down payment? Hopefully after, and so the list prices will be in the 400-450 range. Otherwise I will be REALLY Interested to see how much house you can get in Seattle for less than that.

  26. $1810/month includes all our condo fees, taxes and utilities, plus mortgage. That’s about 12% of our gross pay. We’re in BC in Canada. Our amortization was ~18 years to start. In reality we spend more than $3000/month to housing. We’ll be fully paid off after 5 years.

  27. Now have paid for house–

    was 650.00 monthly piti which was 25% of take home. 170K 1200sf 3b 3b home in Tucson (bought, I might add, the month before the housing bubble burst!) Financed 80K and paid it off in 7 years.

  28. when I was house hunting, I didn’t go with what the bank was willing to loan me either, which was $450K on my $60K (+ potential 25% bonus) income. They said it was because I had no debt. I couldn’t figure out how in the world I could pay off nearly half a million dollars without living on ramen noodles for 30 years. Instead, I felt comfortable with paying $800 monthly so I bought a $132K house and put down 20% on a 15 year loan. Three and a half years later I have paid off 3/4 of the loan as my pay has increased and i still have no other debt or children. I’m due to pay the rest off by October 2013.

    My lifestyle has changed only a bit since college, which means I’m still quite frugal. I didn’t have student loan thanks to full scholarship. So when I graduated I had a good start with no debt and $40K salary. I tithe, donate money to ASPCA, put 12% toward my 401K, have 6 months worth of living expense in saving, sponsor a family in India, and give monthly allowance to my mom and jobless brother. If I don’t give money away, I could pay off the house in 3 years. But what’s the point of making money if we don’t enjoy it and the ONLY goal in life is to not have debt. I know God would not approve me living selfishly. So I obey and have been blessed with good income and a clean bill of health..

  29. Wow, I’m floored by how much lower property taxes seem to be in many places!

    My husband and I live in a major midwestern city and our mortgage with interest is $645/month on a 170k home. We put 20% down and bought about a year ago. Our property taxes add nearly $400/month to that, though we do live in an excellent school district. Our insurance runs maybe $60/month. Altogether, the total is less than 20% of our take home pay. We have been paying extra every month, though, so we are turning our 30 year mortgage into closer to a 20 year.

    • Yeah… our $300K house in upstate NY costs us nearly $1000/month in taxes. It’s nuts — it’s close to as much as our mortgage payment.

  30. We live in Mckinney, TX, a suburb north of dallas. We bought our home brand new in 2010 for 186k. 4 bd, game room, formal dining room, 3 bath, 2500 sq ft. Propert taxes are 2.6% out here, which is about 350 a mo plus insurance. .. i think the min all in is about 1300ish. Our annual gross is 146k base, so our dti for the mortgage is just under 11% , and about 15% of our net. I do NOT want to be house poor!

  31. I live in Falls Church VA, which is a suburb of DC. I pay 1700 a month for my 2 bed 2 bath condo (about a 1000sq ft), including taxes and insurance and condo fees. Its about 23% of my gross and 40% of my net, which is a bit high, but very doable.

  32. I live in Wisconsin, in a suburb of Minneapolis/St. Paul. My 30 year mortgage is $972/month ($747 principal/interest + $192 taxes + $33 insurance). It’s about 20% of my gross income per month. I’m thinking about refinancing to a 15 year mortgage but haven’t made up my mind yet.

    When I bought my house at age 23, the first mortgage person I talked to said he’d approve my total monthly debt payment to be up to 50% of my gross income. I wish I could have seen the look on my face when he said that. If half my gross income went to repay debt each month, I’d have almost nothing left to live on after taxes and other deductions. It would be completely nuts!

    I can see how people buy a much more expensive house than they can afford. After all, if the bank says they can afford it, it must be true! I’d recommend that anyone who is thinking about home ownership get out a calculator and do the math themselves instead of just trusting a mortgage lender or an online calculator to tell them what they can “afford.”

  33. Well, even though I am seriously upside down, I do take comfort in the fact that thanks to my low interest rate mortgage, my PITI is slightly less than I would pay to rent a similar home. It is $7 per month more than I paid to rent my townhome, although the rent did include water, sewer, and garbage.

    When I bought (as a single person) in late 2007, Bank of America was willing to let my debt to income ratio reach 50%. I thought that was ridiculous. Thank goodness. 🙂

    • Oh, and I guess I should mention my PITI is 1081.63 per month. I grossed 49.2k this year, plus receive 5.2k child support. I would like to have more wiggle room. But, I manage OK.

  34. We pay about $1400/month for our mortgage and taxes. We live in a small town in Ontario Canada. We have increased our payment over the years though. It represents about 15-20% of our take home pay. (My husband is an electrician so his pay can vary.) We have 10 years left on the mortgage. We paid $199,000 for this house, in 2005. We are moving in 3 months but won’t be increasing our mortgage. (The new house is worth roughly the same.) The bank felt that we could handle a $700,000 mortgage though. Craziness!!!

  35. Daughter in a Maryland suburb of DC—$1600 w/ taxes and insurance for 1600 sq feet – bought last summer.
    Son in a town outside of Seattle—$880 + insurance 1300 sq ft condo. – bought two summers ago.
    We own our home outright in a small town in Kansas. $4500 for taxes/ 1400 for insurance for 3200 sq feet (and 18 unfarmable acres).

  36. Our house cost $130,000 for 2 bedrms, 2 ba. 15 year mortgage, payment is $1100 per month. We’ll pay it off by the end of 2013, which will be 2 years early.

    We are on the TMMO plan…so we’ve been chunking money at our principal as hard as we can for the past three years.

  37. Paid $67,000 cash for my condo last year in a great area of my city within walking distance to lots of shops and restaurants. My condo dues are $155 per month and $800/year real estate taxes. Tulsa is an undiscovered jewel of a city…shhhh, don’t tell anyone.

  38. We’ll be spending more than that on our house, but I am not planning on staying at home with children and my partner isn’t either. We’ll get a later start on having kids, and we have rental income in the basement as well. So really, with that factored in it’s probably around $1600/month.

    We don’t mind spending a little more to love where we live. But then, we live in Vancouver so what we paid is very moderate.

  39. I had a really good mortgage broker when I bought my first house. She took all my financial information, and we had a meeting. She asked me what I was thinking in terms of how much *I* was comfortable borrowing – and when I explained what I was thinking – which was basically a max of $1500-1600 per month – including mortage, taxes, HOA etc – she didn’t even blink, and just went with it.

    I asked her later what my “official” amount was that I qualified for – she refused to tell me, saying it would just freak me out 🙂 But I’m pretty sure that I would have qualified to borrow a half million dollars, and I ended up borrowing just under 200k, which was at the limit of what I was comfortable with.

  40. We have a $570,000 home (in Boston, so it’s a tiny condo, hah). It’s $2400 a month but we are also paying an extra $2,000 on a small second mortgage that has an adjustable interest rate which should be paid off within a year. On top of the mortgage, we have a $600 condo fee. It’s a lot but not impossible.

  41. We were paying 2150/mo in rent and when we bought we are still paying that amount, but that includes $500 each month extra towards the mortgage.

  42. In the big city of Puyallup (WA), here is our break down:
    Loan: $323K
    Monthly pmt: $1860
    Principal: $535
    Interest: $877
    Escrow (Ins and Taxes): $448
    (No PMI on VA loans)
    Ends up being ~20% of household income. The house is 3,000 sq ft with 4 bedrooms and 2.5 bathrooms, 3 car garage in a really nice neighborhood.
    Good luck in your search for a house!

  43. The recommended standard for house maintenance is 2% of the homes value every year. If you are purhcasing a second hand home 2% (in my case $4 000. per year) is not enough to keep ahead on repairs. I live in a cheap little $200 000 basic subdivision home and I have spent more than $4000 per year each of the last few years replacing urgent needs (roof, furnace and a few windows). Cosmetics are neglected (no granite counter tops here) and the fact that my kitchen window does not open is a minor nuisance.

    Consider home maintenance as a guaranteed yearly expense in a second hand home.
    Consider starting a special account for home maintenance when you have purchase a new home for in the near future when things need replacing.

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