# What % of income do you spend on housing (rent or own)?



## rd_aaron (Jun 24, 2011)

I'm just curious to see what everyone spends as a percentage of net (take-home) household income to put a roof over their head. We are moving into a new place as of the end of the month, and we're paying a decent chunk more in rent than we were previously. It's definitely a nicer & bigger place, but it'll be a bit of an adjustment with the increase in rent.

I would consider the cost of living (putting a roof over your head) to be either:

Rent - Price of rent + utilities (electricity, water, gas)
Own - Mortgage + insurance + utilities + condo fees (if applicable) + yearly maintenance costs

The increase in rent for us will make our cost of living increase from 17% to 23% of net household income. Is this a reasonable amount? I expect people who own are on the higher side due to maintenance, insurance, etc. Would just like to see where we fit in.

Also, not really looking for people who have their house paid off or live rent free somewhere to vote.


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## andrewf (Mar 1, 2010)

I think most people would consider that very reasonable. I currently rent. My rent is about 15% of my gross salary, probably about 20% of my (I don't track my net income that closely). I don't really include investment returns in my income as they tend to be quite variable. I don't know whether you include phone/internet in utilities. That is probably another $1000 per year or so.


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## james4beach (Nov 15, 2012)

Great question. My rent+utilities is 17% of my gross income, using just essential utilities.
Versus net income, I'm not so sure but it's around 25%

I've read the rule of thumb that your housing costs should be less than a third of your gross income


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## james4beach (Nov 15, 2012)

rd_aaron: I think your current 23% (vs net income) is very reasonable, probably on the low side in Canada


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## sags (May 15, 2010)

Ours is 12% of gross income.

Oh..... and Rogers...........another 6% of gross income..............the crooks.


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## RBull (Jan 20, 2013)

Under 4.9%.........????

Makes me think you're living in your moms basement or you make a lot of money and live in communal housing. We spend double+ that and haven't had a mortgage for 19 years.


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## Jon_Snow (May 20, 2009)

Sorry, I voted (I'm about 4%) before I noticed you didn't want the mortage paid off folks... I still have $200 maintenance fees though... and uh, a bit of property tax...

I'm outta here...


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## Siwash (Sep 1, 2013)

My rental of a bungalow including utilities is just over $2000. My wife and I gross approx $155,000 per annum (our combined wage will rise to $190,000 in 3 years) 

Our housing amounts to 16% of our gross. This is why I don't buy a home. We can save, invest and live a bit.

Mortgage = slavery. Been telling anyone who will listen but people are too caught up in the emotion of home "ownership"


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## andrewf (Mar 1, 2010)

Mortgage paid off folks could always include an imputed opportunity cost of the money they have tied up in their residence.


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## crazyjackcsa (Aug 8, 2010)

I'm at 36%. And it's easy to manage.


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## Jacq (Feb 8, 2014)

With ownership, all in costs last year for me came out to about 20% of NI from work only (one income). I only worked 1/2 the year though and am in the best earning years. 
When I bought this house 10 years ago, it was more like 25-30% IIRC and I was working FT. It was manageable but definitely tighter in terms of what I could save (daycare costs etc.) and I decreased my mortgage payments ~ 18 months ago compared to the payment doubling schedule I was doing (probably foolishly) for a few years. This is a 5 BR, 3BA, Calgary area, valued at ~ $350k, purchase price $183.5k. 
Oldest son is looking at buying a condo this year and hopefully will be somewhere in the 20-25% range of NI (including a roommate). But is only 25, so lots of room for NI to go up. Some people are renters, some aren't and he's more of a stay in one place for years type.


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## andrewf (Mar 1, 2010)

5 bdr houses were selling for 180k in calgary 10 years ago? Can they even build them for that? Crazy!


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## kcowan (Jul 1, 2010)

Here is a comparison of living in Vancouver versus Toronto:
http://www.expatistan.com/cost-of-living/comparison/toronto/Vancouver
5% cheaper in Toronto. Try your city!


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## Plugging Along (Jan 3, 2011)

I won't answer in the poll officially because out house is paid off. 


If I consider just basic utilities, taxes, insurance, and split up maintenance costs over the year, we are probably 10%

If we we had our mortgage still, which was really low by today's standards, it would be just over 20%. If the mortgage was based on our house cost today, it would be closer 40%.


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## RBull (Jan 20, 2013)

rikk said:


> Off topic but there's another possibility that's worked well for us ... we've typically had a boarder or two in the old part of the house bringing our housing percent net income to close to 0% in that "0 - 4.9%" ... if you view that income as covering housing costs.


Interesting idea and could be a good one if you want or need the extra money. 

We live in a small village and could probably find 1 or 2 suitable boarders to do this if desired. 2 bedrooms on lower walkout level with separate entrance and kitchen area there now; would make it pretty easy.


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## OurBigFatWallet (Jan 20, 2014)

andrewf said:


> 5 bdr houses were selling for 180k in calgary 10 years ago? Can they even build them for that? Crazy!


A coworker bought their single detached 4 bedroom home 9 years ago and paid $325k (we live in Calgary)


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## OurBigFatWallet (Jan 20, 2014)

We are at around 13% which includes mortgage payment, taxes, utilities. And it's compared to gross income, not net income


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## mrbizi (Dec 19, 2009)

I'm at 21% of net. This includes mortgage payments, property taxes, utilities and maintenance.

Sometimes I am tempted to upgrade to a bigger house (I currently live in a 2000 sq ft house with wife and 2 teenaged kids). However I would rather pay off my mortgage first than live in a bigger house. Another reason for me not to upgrade is that one of my kids will be going to university in a few years and my wife and I plan to pay for most of the expenses. I find that reading this forum also helps reduce "upgradeitis".


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## nobleea (Oct 11, 2013)

I'll provide a few different numbers.

What we currently pay now as we aggressively pay down mortgage (includes all prepayments): about 78%
Without the prepayments: 29%
If we hadn't bumped up our payments by 20% a year for the last few years: 18%
What we'll pay later this year once the mortgage is gone: 5%


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## Jacq (Feb 8, 2014)

It was sort of a special situation and one step away from bank foreclosure - and needed renos - more updating, not really structural stuff. It was originally listed for $240k and I lowballed because I didn't really want that big of a house. I believe the people that owned it before had been in some kind of at fault accident and were walking away from it and their equity (it was empty and they just kind of disappeared one night according to the neighbours). It was way more house than we wanted or needed but the price was very right. Plus it's a bedroom community that has since grown quite a bit and not right IN Calgary. The 3 BR 2 BA townhouse I sold in Calgary in 2000 sold for $116k and they're listed for about $250k now. Sigh... should have stayed there.

Nothing like the time though in 1994-5 when I was looking at houses around 24th St and 4th Ave. and the prices were around $100k for these older century homes. I was thinking "nah, too much to fix up." Lord only knows what the land was worth and they've mostly since sold to small businesses. Dumbest move ever not buying in that area at that time.


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## summer (Jul 7, 2011)

kcowan said:


> Here is a comparison of living in Vancouver versus Toronto:
> http://www.expatistan.com/cost-of-living/comparison/toronto/Vancouver
> 5% cheaper in Toronto. Try your city!



You mean Vancouver is cheaper.


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## blin10 (Jun 27, 2011)

Siwash said:


> My rental of a bungalow including
> 
> Mortgage = slavery. Been telling anyone who will listen but people are too caught up in the emotion of home "ownership"


right, keep telling yourself that to feel better... in some cases renting makes sense, but you're closed minded if you thing people with mortgages are fools


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## kcowan (Jul 1, 2010)

summer said:


> You mean Vancouver is cheaper.


Yes I meant than not in. Partly because land values are not properly represented.


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## Potato (Apr 3, 2009)

We look to be the outliers. Up around 70-75% right now with Wayfare still on mat leave. Even when she's working it'll be around 40-45%. We don't travel or eat out much, and need our space -- we're consciously/voluntarily house poor.


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## rd_aaron (Jun 24, 2011)

Oops, almost forgot about this. Thanks for the responses everyone. I feel a little better about our situation now. We gross about $165k/year, and we are just moving into a townhouse that will run us about $2000/month after utilities. This was $550/month more than what we were currently spending. I never thought I'd pay that much unless I was purchasing a place and building equity. However, we learned that we were paying below market rate for the last two years as the price of renting in Calgary has seemingly skyrocketed. It will just be an adjustment for the first bit as we adjust our spending to our new living expenses.


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## newtothegame (Jan 2, 2014)

I pay about 1/3 of my net income for my mortgage, utilities and strata fees. However, I did put down a substantial down payment, so this does lower my monthly obligations. I live alone, so it is a one income household.


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## NorthKC (Apr 1, 2013)

I used to have to pay 27% on average in my last apartment. I did reach 44% at one point just for a decent 1-bedroom apartment but I had low salary and lived in a city where the vacancy rate was less than 1% and the cheapest apartment was $900 a month for a one-bedroom. That was bad but the market is much better now. Currently, only paying 4% but am living with family at the moment and do contribute in other ways.

So, 23% is pretty darn good!


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## kcowan (Jul 1, 2010)

For a few years, we were at 30+% but now that we have sublet our place up north, we are around 20+%. The rental agent says we could get more if we went for multiple short term rentals but we prefer the lack of wear and tear with one tenant.


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## rd_aaron (Jun 24, 2011)

It looks like my 23% is probably okay. I try to live below my means, and I think we're probably living at our means with this townhouse, but at the same time, we own only one 7 year old car that doesn't have any payments, the only debt we have is $3500 in student loans which I've been purposely paying off really slowly (TFSA is beating the interest rate on the loan), we only go out for supper 2 or 3 times a month, etc. so I think altogether we're probably still doing okay.


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