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Having to pay >60% of monthly salary on a mortgage for the next 25 years isn't exactly my definition of financial freedom. If the market crashes you have no fr
by janekm 5y ago
Having to pay >60% of monthly salary on a mortgage for the next 25 years isn't exactly my definition of financial freedom.
If the market crashes you have no freedom to move for opportunities elsewhere.
Here in London, rent is <50% of mortgage payments on an equivalent property.
- soarfourmore 5y ago> Having to pay >60% of monthly salary I moved to a MCOL city where my mortgage is <20%. my salary
- mustyoshi 5y ago”60% monthly salary on a mortgage" I think everyone would agree that that is not financial freedom, but it's commonly accepted and taught that your rent/mortgage shouldn't be more than 30% of your take home.
- janekm 5y agoThat was my poorly made point, indeed... It can be more sensible from a financial freedom point of view to rent at 30% of take-home pay than mortgage at 60%.
- ClumsyPilot 5y agofor some people that 30% is literally impossible in a major city
- jjk166 5y agoAround here a mortgage plus taxes is quite a bit less than rent for a comparable square footage and year of construction. Rent should be more than mortgage as you are paying your landlord's mortgage plus the overhead of renting it out. Even if your landlord has held the property for a long time, they should take out new mortgages and invest the money rather than let it sit idle. There are some markets where the demand to rent is not coupled to the demand to buy, but this highly atypical.