Income versus living expenses :-

posted 3 years ago in Money
Post # 3
2571 posts
Sugar bee
  • Wedding: August 2011

I’m in Ontario and I don’t fall into this category. 


Mind you, I work in the GTA but choose to commute.



And I guarantee that if people you knew were living this way, they wouldnt be telling anyone. 

(edit: we pay 20% towards our mortgage)

Post # 4
926 posts
Busy bee
  • Wedding: September 2013

When we were house hunting, my dad (an accountant) told us the rule of thumb was that your mortgage should be 25% of your household income.  Ours is almost that actually.  All other joint bills (groceries, utilities, insurance) added to that, we come out around 40%.  We live in metro Atlanta, so this is probably a little lower since cost of living here is on the lower end of the US.  We don’t have car payments right now, so that is helping.

I’m also curious how other households in certain areas do… Following.

Post # 5
3978 posts
Honey bee
  • Wedding: September 2014

Combined, we’re about a third (NE US) but we’re not combining finances so half of the rent is just about half of my income 🙁

Post # 7
968 posts
Busy bee
  • Wedding: July 2013

@MrsPanda99:  including my property tax I pay 18% on mortgage. 

Including extra mortgagement payments, property tax, house insurance and utilities… its about 30% of our income.

I’m in Ontario too 🙂

Post # 9
606 posts
Busy bee
  • Wedding: November 2013

I read that rent/mortage shouldn’t be over 1/3 of your income.  I live in a high cost area so I do know some people who a ton on rent. I spent about half of my income on rent when I first moved here but now I have a better job and I spend about 25% of my net income on rent.

Post # 10
10454 posts
Sugar Beekeeper
  • Wedding: January 2011

For a while, it was quite a bit higher.  We also had a period of time where neither of us had any real income, just a very small amount from investments.  I think most people have at least one period of time in their life when expenses are more than income.  That’s one of the reasons why people save.  We did ok, but now our rent is less than half our income so we’ve been able to replenish our savings and then some.

Post # 11
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

Our monthly mortgage payment (P&I, property tax escrow, home owner’s insurance escrow) for the Washington DC metro area is 20.6% of our net monthly income (after tax and health care premium deductions). We saved for a very long time to get a 20% down payment and stuck to a challenging house budget in order to be at a monthly payment that is comfortable for us. I can’t imagine paying 50% of our net income towards housing.

Post # 12
6450 posts
Bee Keeper
  • Wedding: June 2013

I couldn’t find an actual percentage for our area but I just used the average income and rent and came up with 25%.

Personally we spend  less than 15% on rent and utilities. I guess if you count  that most of my salary goes to student loans and we are living mostly on his salary it goes up to 20%. These are all pre tax calculations so I guess that makes a difference too. 


Post # 13
10219 posts
Sugar Beekeeper
  • Wedding: December 2012

Interesting topic.

I know when purchasing houses in the past the rule of thumb was one’s PIT (principal, interest and ALL taxes including annual municipal) should not be more than 33% of one’s income. 

BUT as others have mentioned, that wouldn’t cover all of the Living Expenses that come with owning a house, or maintaining a property (even a rental).  There would be Utilities to add into the mix… the necessary ones like… Gas / Heat – Hydro – Water & Sewar.  As well as optional ones that people tend to count into the mix as well… Phone – Tv – Internet.

If you own a house, they say you should count on a MINIUM of 10% of your Mortagage Payment (or aprox 1 month equivalent out of the year) for Other Expenses to maintain the property… be that to hire out help, or purchase things to do it… Lawn Maintenance (Lawnmower, fertilizing, flowers) – Snow Removal – and Painting & Repairs.

So ya I could see where someone who is paying close to the 33% mark to JUST BUY a home, might find their TOTAL HOME EXPENSES to be up around 40 or 50% at the end of month.

Then you add in the fact that the largest amount of Ontarians live in the Golden Horseshoe… Niagara thru to Oshawa (7 Million) OR for the Extended Horseshoe from the Tri-City Area (CKW) north to Barrie and East to Belleville / Peterborough (8 Million) and that is more than 50% of the population of the entire Province (13.5 Million)

The Golden Horseshoe (either definition) where the highest cost of housing is in all of Ontario.

And if we are just talking RENT… well lets face it rent is ridiculous in Toronto, and most renters are going to be doing so because they cannot afford to buy… and they cannot afford to buy because they don’t make a lot of money.  And if you don’t make a lot of money, then rent is going to be even more ridiculous !!

It is a vicious circle for sure.

Here is a contrast of examples for you…

A suburbian regular single family dwelling in the GTA / Golden Horseshoe now is going for about $ 1 Million… in Eastern Ontario, we still consider the market here to be steep (Ottawa & the NCR) but the same house here is about 50% at $ 500 K.  One can get into a townhouse here for still under $ 300 K ($ 200 K if you are in a smaller city or town).  NONE OF THAT IS DO-ABLE in Southern Ontario.

Southern Ontario is more and more beginning to look like the large metro areas of the USA in terms of costing… NY, LA, Chicago etc.


Post # 14
4576 posts
Honey bee
  • Wedding: September 2014

Combining both of our monthly incomes and then looking at the amount we pay in rent total, it’s 20%.

Post # 15
2575 posts
Sugar bee
  • Wedding: May 2014

Combining both of our incomes, we currently pay about 14% in rent.  Interesting to know we can swing about double for when we start house saving/hunting next year.  Hopefully I’ll be making more money then so that we can bump that up a bit.. 🙂

Post # 16
2460 posts
Buzzing bee
  • Wedding: November 2013

I live in Calgary and renting is ridiculously expensive and it’s hard to even find a rental property right now so it’s definitely common here. It makes me feel thankful every single day that we’re not in that situation. I can’t even imagine!

Funny story (kind of) – when I first moved out I bought a cheap condo, which I was fine with paying, but then I got a car lease. The monthly payments were super cheap but I didn’t even think to look into insurance. Age 19 living in Alberta with a brand new car?! Yeah, I should have looked into that! My car insurance was 80% of one paycheque!

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