How Much Should You Spend on a Home?
- Della Lazare
- 6 days ago
- 1 min read
Figuring out how much to spend on a home isn’t just about what you’re approved for—it’s about what you can comfortably afford long-term.
The 28/36 Rule (Starting Point)
28% Rule: Spend no more than 28% of your gross monthly income on housing (mortgage, taxes, insurance).
36% Rule: Keep total monthly debt under 36% of your income.
👉 Example:If you earn ₱100,000/month
Housing budget ≈ ₱28,000/month
Total debt limit ≈ ₱36,000/month
A Safer, Real-Life Range
For more flexibility and less stress:
Aim for 20–25% of your income on housing
This gives you room for:
Emergencies
Daily expenses
Investments or business (important if your income isn’t fixed)
Don’t Forget Upfront Costs
Buying a home includes more than the monthly payment:
Down payment (10–20%)
Closing fees
Moving costs
Repairs or furniture
Smart Price Range Rule
Ideal home price: 2.5× to 4× your annual income
If income fluctuates → stay closer to 2.5–3×
Reality Check
Banks may approve you for more than you should spend. The goal isn’t to max out your loan—it’s to stay financially comfortable.
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